These chain metrics suggest that Bitcoin price correction cannot be prevented

  • Bitcoin collapses to $ 30,000 in search of solid support after losing support in the 200 SMA.
  • The SOPR is rapidly heading toward one, suggesting ongoing analysis.
  • Bitcoin is likely to present a dip buying opportunity, allowing more investors to enter the market.

Bitcoin is trading below $ 30,000 after a hurricane-like wind gust swept across the cryptocurrency market. The leading digital assets fell at $ 38,000, surrendering to losses that took a pit stop at $ 34,000. However, the bearish outlook grew stronger, forcing BTC to test prior support at $ 30,000.

According to the Spent Output Profit Ratio (SOPR), a chain metric by Glassnode, the correction is set to continue. Operating prices below $ 30,000 could bring the support at $ 28,000 on the test, while discounts are likely to extend to $ 25,000 as predicted Thursday.

Bitcoin SOPR anticipates extended analysis

Markets are psychological, and that is the need to understand why certain things happen. Recently, chain metrics have become fundamental tools for understanding bearish, consolidation and bull periods.

The SOPR is a measured indicator of outputs spent on the network. It is done by dividing the substantive value (USD) by the value of output (USD) at creation (price sold / price paid).

A value of SOPR higher than one implies that all holders of obsolete outputs negotiate for profit. On the other hand, any other value means that they are at a loss at the time of negotiation. People usually sell when they are in profit.

Bitcoin SOPR chart

Bitcoin SOPR chart

Currently, the SOPR is declining toward one, which means less BTC is negotiated on the chain at extreme profit. The SOPR is likely to continue with the withdrawal eyeing the center line.

As recently explained, Bitcoin could also be nearing a reversal and would offer an opportunity to buy the dip. Realize that an SOPR of less than one in bull markets is pushing down supply, leading to a rise in price.

Bitcoin Adjusted SOPR Chart

Bitcoin Adjusted SOPR Chart

Bitcoin is exchanging hands at $ 30,500 after testing the pre-buyer congestion zone at $ 30,000. Various levels of critical support have already been lost, including the symmetrical triangle support and the 200 Mobile Average on the 4-hour chart.

An analysis under the triangle’s lower trend line just points Bitcoin to $ 25,000, as predicted on Thursday. Thus, the technical perspective fits the SOPR, suggesting a continuous correction before a significant reversal enters the picture.

BTC / USD 4 hour chart

BTC / USD 4 hour chart

It is essential to realize that Bitcoin is trading below all applied moving averages. Therefore, overhead pressures are likely to rise as odds for a bearish impulse surge.

At the same time, the Mobile Average Convergence Divergence or MACD adds credibility to the bearish forecast by first diving into the negative region. Second, the 12-day moving average slipped below the 26-day moving average.

Conversely, holding over $ 30,000 is likely to call for stability in the market, giving investors and bulls plenty of time to buy the dip. An increase in purchase pressure would eventually catapult Bitcoin in trajectory to $ 40,000.