The analytics firm Alphractal released a market update highlighting a potential Bitcoin consolidation based on the SOPR Trend Signal.
SOPR Signal Analysis
The SOPR Trend Signal measures transaction profitability on the blockchain and historically provides insight into market sentiment. Alphractal notes that when the signal turns red, it indicates significant profits for many addresses, and if it exceeds the upper threshold, it often acts as a bearish signal for Bitcoin.
Impact on Bitcoin Market
Alphractal emphasizes that this is not the end of the current bull cycle despite the expected decline in trading profitability in 2024 and 2025. They point out that a similar SOPR decline occurred in late 2021, yet Bitcoin managed to reach a new all-time high.
Future Outlook
Alphractal suggests that Bitcoin's most profitable phase may have already passed, particularly following the December 2024 peak. Looking forward, they expect lower returns from on-chain activity, which may support a market consolidation phase in the coming months.
Alphractal does not foresee the end of the bull market but suggests reduced transaction profitability, potentially supporting a Bitcoin consolidation phase.
