Investors Alert: CryptoQuant Report Reveals Need for New Funds in 2023 Cryptocurrency Market
In the world of cryptocurrency, the need for fresh funds has emerged as a critical factor for a bullish market in the coming year. According to a report by CryptoQuant, the SOPR ratio, which is calculated by dividing long-term holders’ SOPR by short-term holders’ SOPR, has lowered significantly. This indicates a rise in short-term buying, which could lead to a bull market entry or a price range between 15k-25k.
The report suggests that to continue the flow of money in the market and boost prices, external funds are required to meet the conditions for a bullish market in 2023. However, the current short-term holder SOPR has a bearish divergence pattern, indicating that new cash inflows are necessary for a price rise.
The Spent Output Profit Ratio (SOPR) is a metric that assesses the profit ratio of market participants by comparing the value of outputs at the time they were spent versus the time they were created. Essentially, SOPR allows for an estimation of whether spent transaction outputs were distributed at a profit or not. To calculate SOPR, the USD value of spent outputs at the time they were spent (realized value) is divided by the USD value of spent outputs at the time they were created (value at creation).
The report highlights the previous trends of short-term holder SOPR, which recorded a steady increase in 2018, 2020, and 2021. This emphasizes the need for fresh investment and liquidity to sustain the cryptocurrency market’s growth.
The report’s analysis points towards the high point after the Luna issue and the eco bubble being the same, which indicates that the cryptocurrency market could see a similar growth pattern if the conditions are met. However, the SOPR ratio’s lowering signals the need for new funds to sustain the market’s growth.
The need for fresh funds is critical for the cryptocurrency market to enter a bullish phase in 2023. With the current short-term holder SOPR showing bearish divergence, new cash inflows are required to meet the market’s demands. This presents an opportunity for investors to inject liquidity and capitalize on the market’s potential growth.
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