Bitcoin: Analysis Firm Explores Possible Future Scenarios for the Cryptocurrency

Alphractal, a cryptocurrency analysis firm, has voiced concerns about Bitcoin's current market trajectory, suggesting it may be on the verge of entering a bear market phase.

In their latest report, the firm emphasized the importance of Bitcoin’s spent output profit ratio (SOPR), a key indicator of market trends. By incorporating SOPR with both exponential and simple moving averages (EMA and MA), Alphractal aims to filter out market hype and provide more reliable entry and exit signals.

This method has been critical in identifying Bitcoin’s market cycles since 2015, with bull markets generally being shorter and bear markets tending to last longer.

In 2024, Alphractal detected an unusual pattern in Bitcoin’s market behavior. The firm observed that only one SOPR signal had dipped below the critical threshold of 1.015, a typical indicator of a looming bear market. This contrasts with past cycles, where two such signals preceded sustained bearish trends.

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According to the analysis, Bitcoin could either reach a new all-time high, similar to its peak in November 2021, or face the onset of a bear market. Alternatively, the SOPR could rise again, initiating a re-accumulation phase reminiscent of the 2019-2020 period, potentially setting Bitcoin up for future gains. However, this process may take several months to unfold.

⚠️The first sign of a downturn has already appeared for Bitcoin.

We developed a metric called Spent Output Profit Ratio (SOPR) Trend Signal, which identifies bullish (uptrend) and bearish (downtrend) signals throughout Bitcoin’s history. When red signals appear, it means many… pic.twitter.com/zDgtBwbUFC

— Alphractal (@Alphractal) September 21, 2024

Kosta Gushterov

Kosta has been working in the crypto industry for over 4 years. He strives to present different perspectives on a given topic and enjoys the sector for its transparency and dynamism. In his work, he focuses on balanced coverage of events and developments in the crypto space, providing information to his readers from a neutral perspective.