It was past a few days when Bitcoin was trading above $23,000 and this looked like the market was on a recovery phase. But yesterday, the crypto market was once again bearing the red flag after Bitcoin lost its $23,000 price range. However, the world’s first cryptocurrency has now reclaimed the lost levels.
Meanwhile, when Bitcoin’s daily chart is considered, it is seen that the asset has recorded six red candles. Also in the last 24hrs Bitcoin price has registered a surge of 1.17% trading at $23,235.
Now, to understand where the market is heading there are a few important factors to consider.
Stablecoin Supply Ratio (SSR)
Since mid-June, the Stablecoin Supply Ratio of Bitcoin was fluttering around 4.1. However, the current SSR rating is flashing 5.1 and this suggests that the stablecoin supply has declined. If there is a drop in the supply of stablecoin, it indicates that selling pressure will increase and in turn a price.
Spent Output Profit Ratio (SOPR)
Yesterday, August 4th, the flagship currency’s Spent Output Profit Ratio (SOPR) registered a 3-month high and is strongly headed towards 1. This means that the currencies which were purchased at loss will be sold for profit.
This scenario might appear positive, but that’s not the case. If the SOPR is trading upward, it indicates that illiquid supply is back into liquid circulation and this is another negative impact on the Bitcoin price
The next to look at is the Bitcoin address and these addresses are on profit after recording a new 1-month high. Currently, around 26.06 million addresses are yet to claim their profits. Hence, these addresses will now be forced to sell their holdings to gain some profits.
Also, this points towards another bearish pull.
Considering the above metrics we can assume that still this is not an end to an ongoing bearish trend. Hence, we can expect that the Bitcoin price will see another pull back and any recovery phase in the upcoming days will most likely be a bear trap.