Monthly Archives: Februar 2023

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LTH SOPR: Check BTC’s Profitability and Market Sentiment

• BTC’s Long-term Spent Output Profit Ratio (LTH SOPR) metric has grown due to the YTD rally in Bitcoin’s price.
• When the LTH SOPR is below 1, it suggests that long-term holders are losing money and may be motivated to sell.
• Analysts suggest that traders and investors should closely monitor the SOPR metric to anticipate potential price direction and market sentiment.

Understanding Long-Term Holder’s Performance: BTC’s LTH SOPR

The Long-term Spent Output Profit Ratio (LTH SOPR) is a metric used to understand the overall market sentiment, analyze profitability and losses incurred during a specific period for a particular crypto asset. It tracks the amount of profit realized for all on-chain coin transactions.

Implications of BTC’s LTH SOPR

When the LTH SOPR is below one, it suggests that long-term holders are facing losses and could be motivated to sell their cryptocurrency holdings. Conversely, when the metric is above one, long-term holders are realizing profits and may hold or accumulate more coins.

BTC’s Bearishness Impacting Mining Activity

The bearishness that plagued 2022 trading year resulted in significant losses for market participants, including long-term investors per the LTH SOPR. According to an analyst from CryptoQuant, this had caused its metric to trend below one since late May 2022. With the general uptrend in the crypto market since this year began however, „the metric started recovering and slightly increased due to the uptrend in Bitcoin’s price.“

Monitoring The Metric To Anticipate Potential Price Direction & Market Sentiment

Crypto analysts suggest traders and investors should closely monitor Bitcoin’s LTH SOPR metric in order to anticipate potential price direction and market sentiment accurately. This way they can assess if there is any indication of bearishness or bullishness within the market which will affect their trading decisions accordingly.

Mining Activity Showing Correlation With BTC Price

Mining activity on BTC network is significantly impacted by its king coin price as miners require an ongoing cost such as electricity running costs which ties their behaviors with Bitcoin’s price movements directly. Therefore metrics such as Puell Multiple can be studied regularly as they compare estimated 365 day average mining costs with current prices of BTC so traders can have a better idea about miners‘ activities affected by changing prices over time .

Polkadot Booms: DOT Demand Surges as Market Conditions Improve

• The Messari report reveals that Polkadot’s daily active accounts and new accounts increased significantly in Q4 of 2022.
• A recent surge in active social users was a precursor to the volume surge in early January, supporting the demand for DOT.
• However, recent market conditions have led to a slowdown in demand and significant sell pressure on DOT.

Polkadot’s Address Activity Uptick

Polkadot’s address activity has registered an uptick as market conditions improve. After reaching its bottom range during Q4 of 2022, the market is seeking more directional clarity, with Polkadot off to a healthy start this year so far in terms of its operations.

Q4 2022 Messari Report

A recently released Messari report revealed the state of Polkadot in Q4 2022; daily active accounts grew by 64% while new accounts grew by 49%. This growth may be attributed to users migrating from FTX and a strong recovery in Q1 could contribute to further user activity and growth.

DOT Demand Hanging In The Balance

The recent surge in active social users was a precursor to the volume surge that manifested itself in early January, contributing significantly to DOT’s demand. However, since then we have seen lower demand and significant sell pressure on DOT resulting from FUD – driving it down 13% from its press time price at $6.20.

Projected User Growth For Q1 2023

It is expected that Polkadot user activity may grow at a higher pace than before in Q1 2023 due to the market recovery encouraging more user growth – however this is yet to be seen.

Conclusion

Although Polkadot’s address activity has seen an uptick as market conditions improve, it remains unclear what will happen next without reference points such as the Messari report revealing details about user growth and other metrics which can help us understand what lies ahead for DOT demand.