According to on-chain data, current Bitcoin SOPR trend suggests the market may be nowhere near the price bottom.

As pointed out by an analyst in a CryptoQuant post, the BTC SOPR hints there may be some ways to go still before a bottom forms.

The “spent output profit ratio” (or SOPR in brief) is an indicator that tells us whether investors are selling at a profit or a loss right now.

The metric works by evaluating the history of each coin on the chain to see which price it was last moved at. If this price was less than the current price (that is, the selling price), then the coin sold at a profit.

On the other hand, the last price being more than the current one would imply the investor realized a loss on this coin.

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When SOPR has a value more than one, it means the overall market is making a profit at the moment. While ratio values below the threshold imply a realization of losses.

Now, here is a chart that shows the trend in the Bitcoin SOPR over the past few years:

In the above graph, the quant has marked the important points of trend. It seems like bottoms have historically formed whenever the Bitcoin SOPR has dipped below the value = 1 mark.

The significance of this “one” level is that investors are just breaking even at this point. The value drops any further and they are selling at a loss.

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After capitulation, there aren’t many sellers left in the market normally, hence why a bottom forms during such periods.

Now, looking at the current trend, it seems like the value of the Bitcoin SOPR is around 1.31 right now. This is still a bit above the 1 level, which could suggest there may be more downside in the store for the crypto before a new bottom formation takes place.

However, it’s also possible the price may see a temporary rebound here, as it already did once earlier in the year around a similar SOPR value.

At the time of writing, Bitcoin’s price floats around $40.7k, up 1% in the last seven days. Over the past month, the crypto has lost 3% in value.

The below chart shows the trend in the price of the coin over the last five days.

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