Are we entering a new crab-walk era?
The Trump presidency is in. More interest rate cuts are probably coming, but not in the size many initially expected.
The FOMC's next meeting will end on December 18th. That's when we'll hear news about whether QT is ending--which would provide the liquidity necessary for an alt-coin season. It's not guaranteed.
In the interim, will the market crab-walk sideways? If so, we all know the playbook: dollar cost average (DCA) the majors, such as $BTC or $SOL.
To answer this question, our team looked at the Spent Output Profit Ratio (SOPR) for Bitcoin. The SOPR = sold price / buy price.
You can segment $BTC holders by long-term (over 155 days) and short-term (less than that) to derive a better signal.
Not surprisingly, $BTC HODL-ers don't tend to provide good signals for a trader -- even if they are whales. In the image below, you'll see the SOPR for long-term holders in orange while $BTC's price is in black. You'll notice that peaks aren't followed by declines. Bottoms aren't followed by price increases. The long-term holders mostly just hold.
Image of $BTC's price and the SOPR for long-term holders.
It's a different story with short-term holders. I need to give you an initial idea, though, namely context-relative indicators.
The SOPR is far more meaningful if you place it within a broader context. A rise or decline in a bull run is different from that in a bear market. We're in a bull run, so we'll have some different ranges in mind.
In a bull market, if the SOPR rises above 1.1 that tends to signal a peak -- which is exactly what happened at the $99k range for $BTC. If it drops below 0.95, that has historically been followed by price increases -- in the next 14 days at least.
$BTC's price with the SOPR for short-term holders for the previous ~14 months.
Presently?
We're at neutral, which, historically, indicates a ... crab walk for the near term. DCA if you want. DYOR. This is not financial advice. I'm just reporting data results here.
Happy Trading!
-Sebastian Purcell, PhD
