Benzinga - Analysts at crypto exchange Bitfinex have suggested that the Bitcoin (CRYPTO: BTC) market may be on the cusp of a new bull run.
The report, which analyzes on-chain metrics and investor behavior, indicates that Bitcoin's Spent Output Profit Ratio (SOPR) and Net Unrealized Profit and Loss (NUPL) indicators have turned green, suggesting that Bitcoin transactions are, on average, profitable since the cryptocurrency breached the $29,500 mark.
The report also highlights a significant increase in Bitcoin miners sending their coins to exchanges, a trend typically observed either during a bear market capitulation or at the onset of a bull market.
However, the analysts state that this activity is more likely linked to derivative trading activities, with Bitcoin being used as collateral, rather than direct selling on the spot markets.
This trend, therefore, does not exert immediate bearish pressure on Bitcoin prices.
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For the past two weeks, the SOPR has remained above one, indicating that market participants are confident in their spot positions and are not selling at a loss.
This behavior provides a critical supportive base for Bitcoin's price as the market awaits further bullish signals.
"In a bull market, most market participants are expecting further price appreciation, which means they are unwilling to sell at a loss. This generally keeps the SOPR value above one during bull markets, because there is very little supply coming onto the market at breakeven prices," the analysts told Benzinga.
The report also notes a tug-of-war between bullish and bearish sentiment, as reflected in Bitcoin's order flow data. High positive deltas at the $29,500 and $31,000 levels suggest strong buying interest, which is largely absorbed by limit sell orders.
This balance between market buys and sells has created a critical zone that could dictate Bitcoin's trajectory in the coming weeks.
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