The price of Bitcoin (BTC) fell to the $ 44,000- $ 45,000 support level on February 28 for the third time last week.
The BTC / USD pair briefly fell below $ 44,000 in Bitstamp before reducing some of the losses, coming back above $ 45,000 at the time of writing.
‘Total rest’ for SOPR, financing rates
Some analysts have pointed to an increase in mining sales as the reason behind the latest price drop.
It’s a whale war, and you know who has the real power.
US Institutional Investors
– Currency base output flow = STRONG BUY
– Coinbase Premium = BUYBTC Whales
– BTC Reservation = BUY
– Stablecoin flow TXs = BUYMiners
– Miner output flows = SELL
– Miner to exchange flows = SALE pic.twitter.com/fhVBp8qocm– Ki Young Ju 주기영 (@ki_young_ju) February 28, 2021
Fortunately, the third retest of this level of key support can make a good impression for bulls. Glassnode data analysis feature noticed that the daily Bitcoin Spent Output Profit Ratio (SOPR) underwent a “full reset”.
The SOPR essentially shows whether the outflows spent are in profit or loss at the time of the transaction. This main metric was negative for the first time since September 2020. In other words, investors are now moving BTC with a slight loss on average, suggesting that profit-taking has declined, according to Glassnode.
“In total, we saw a net loss realized on the network of $ 243 million yesterday”, analysts added.
“This is the lowest daily value since April 2020.”
Meanwhile, popular trader Philip Swift, co-founder of the Decentrader trading suite and creator of the Golden Ratio multiplier method, also pointed the failure of the SOPR.
He considers this to be a potentially bullish turnaround for the BTC price in combination with the redefinition of last week’s derivative financing rates, because such events previously coincided with the start of new upward trends.
“SOPR has now been redefined (green on the chart), which means that the portfolios they are selling are now selling at a loss,” he explained, adding:
“This is a strong sign of ‘buy the drop’ in a bull market. This, along with the rebuilding of derivative funds, is optimistic.”
The last time that the SOPR turned green was five months ago, when Bitcoin was trading for about $ 10,000. At the time, this was a fundamental obstacle for BTC to unleash a new bull market. Since then, the price has gone up more than five times to new highs of around $ 58,000.
However, many traders remain cautious as the market enters the month of March, which has historically been bearish for cryptocurrencies and all markets in general.
“I think March may be slow with a lack of confidence in traditional markets, but overall I am optimistic about Bitcoin and I expect a significant increase in the next three months,” said Swift in private comments.
$ 44K- $ 45K remains the key level to watch
In the meantime, Bitcoin traders are eyeing the $ 44,000- $ 45,000 level. Trader Willy Woo, for example, said the $ 45K level is very strong support and expects any drops below this level to be bought aggressively, should they occur.
UTXO price distribution. This is the most accurate on-chain version of the volume profile. The peaks represent the price at which most currencies changed hands.
$ 45k up is a very strong support.
Any drop (if you’re lucky) in $ 39k is a no-brainer BTFD.
Data: @glassnode pic.twitter.com/Z4xbEr0jTv
– Willy Woo (@woonomic) February 27, 2021
In addition, researchers at on-chain analytics firm Santiment believe that the entire cryptocurrency market now depends on Bitcoin to stay above this key level.
“It’s been a red weekend so far, with most eyes on Bitcoin, which has rebounded against the escalation that altcoins were doing,” they said, adding:
Keep an eye on the $ 44k support level for BTC as an indication to monitor all encryption. As well as BTC’s on-chain activity.