Bitcoin’s SOPR Nears a Pivotal Level - Is a Bigger Correction on the Horizon?

As Bitcoin’s price wavers, key market indicators signal potential turning points. Will the bulls regain control, or is further downside inevitable?

Bitcoin’s price has been on a steady decline, now hovering just above $81,000 - a notable drop from its all-time high (ATH) in January. At the time of writing, BTC is trading at $81,086, showing a modest 1.7% gain in the past 24 hours but still down 2.3% over the last week.

This ongoing correction has investors on edge, questioning whether the flagship cryptocurrency will stage a recovery or enter an extended consolidation phase. While no single factor explains Bitcoin’s recent price movements, CryptoQuant analyst Darkfost has pointed to an intriguing correlation between BTC and the Nasdaq index.

Bitcoin’s Growing Correlation with the Nasdaq

Darkfost highlights that Bitcoin currently moves more in sync with the Nasdaq than with the S&P 500, suggesting that macroeconomic trends and broader market sentiment are playing a crucial role in BTC’s trajectory.

This correlation implies that shifts in U.S. equity markets, Federal Reserve policies, and overall risk appetite among investors may be exerting influence over Bitcoin’s price movements, making external factors increasingly significant in determining its next move.

SOPR Signals a Key Market Phase - What’s Next?

Amid Bitcoin’s price fluctuations, CryptoQuant analyst Kripto Mevsimi has been closely watching the Short-Term Holder Spent Output Profit Ratio (SOPR) EMA (155), a key indicator of market cycles and investor behavior.

According to Mevsimi, the SOPR EMA (155) recently peaked and is now on the decline, signaling that short-term holders are cashing out with diminishing profits. This trend often points to a market in transition - potentially entering a consolidation phase.

The critical level to watch is SOPR = 1. If this level holds as support, it could mark a healthy reset before Bitcoin’s next upward move. However, a drop below 1 could indicate rising selling pressure, potentially dragging the market further downward.

For Bitcoin’s long-term bullish momentum - which began in early 2023 - to remain intact, SOPR needs to stabilize around 1 and then rebound. If this fails to happen, it could suggest a deeper shift in market dynamics, putting BTC’s long-term growth at risk.

Bitcoin Whales Are Accumulating - A Bullish Sign?

Despite short-term price uncertainty, another CryptoQuant analyst, caueconomy, has identified a strong accumulation trend among large Bitcoin holders. Over the past 30 days, whales have added more than 65,000 BTC to their portfolios, signaling sustained buying interest from major investors.

Unlike miners and exchanges, which often sell BTC to manage liquidity, whales appear to be absorbing supply rather than offloading their holdings. This ongoing accumulation is particularly significant given the market correction, suggesting that deep-pocketed investors remain confident in Bitcoin’s long-term potential.

If this trend persists for several more weeks, it could resemble the accumulation phase seen between November and December, which ultimately fueled Bitcoin’s rally in late 2023.

Will Bitcoin Hold Strong or Face Further Declines?

As Bitcoin navigates this critical juncture, key indicators like SOPR and whale accumulation will be crucial in determining the next move. If SOPR stabilizes and accumulation continues, Bitcoin could be gearing up for another leg higher. But if selling pressure mounts and macroeconomic conditions weigh heavily, the market may have further downside ahead.

For now, investors remain watchful, waiting to see if Bitcoin can regain momentum - or if a deeper correction is on the way.