Here’s the Bad News for Bitcoin: Capitulation Is Not Here Yet (Analysis)

Despite Bitcoin’s massive drawdown over the weekend, one analyst believes that the bottom isn’t in yet. Chartoday – an educational resource for technical analysis – claims that most “bearish targets” have still not been touched.

According to a post logged on the on-chain analytics site CryptoQuant, the Spent Output Profit Ratio (SOPR), is not yet showing signs of bottoming.
SOPR measures whether moved coins are being sold at either a profit or a loss. A value over 1 means they are being sold at a profit, and vice versa.
The metric has only recently descended below 1. However, this event has historically coincided with further consolidations and price pullbacks in past bear markets.

“Bitcoin’s next move is probably to keep going down until we see way more coins being sold at a loss,” reads the post. “That’s what capitulation implies in the end.”

The entire crypto market has now collapsed to lows unseen since December of 2020. Bitcoin’s relative strength index (RSI) – an indicator of an asset’s momentum and whether it is overbought or oversold – also touched an all-time low.
CryptoQuant CEO Ki-Young Ju further elaborated on market conditions over Twitter. He clarified that the average blockchain wallet is now at a loss.
In late May, Ju stated that Bitcoin was approaching its “cyclic bottom,” using a measure of UTXO age bands.

“UTXOs over 6 months old take 62% of the realized cap,” he said. “In the 2020 March great sell-off, this indicator reached 62% as well.”

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