Bitcoin’s SOPR flashes sell alert — Traders, why THIS is important!

• The SOPR Trend Signal has finally crossed an important mark, issuing the second sell signal for Bitcoin.
• BTC Dominance was showing signs of reversal as ETFs saw massive outflows in the past 24 hours.

Analysis of the Bitcoin [BTC] Spent Output Profit Ratio (SOPR)  showed that it had crossed above a significant threshold, marking its second sell signal in recent times. The SOPR peaked at 1.03, but has since been declining.

Although the SOPR value has dropped below its peak, it hovers just above the strategic red dashed line set at 1.01.

Historically, Bitcoin has shown a propensity to issue two sell signals before entering a bear market phase, mirroring the current scenario.

Source: Alphractal

Staying above this 1.01 SOPR value line could allow Bitcoin to continue its upward trend, despite the bearish signal and sustained stay below the $100K price levels.

However, should SOPR sustain below this threshold, it suggests an increased likelihood of BTC market consolidation or a price decline, acting as a crucial indicator for potential investor strategy adjustments.

BTC Dominance signals reversal as…

Further analysis of Bitcoin Dominance (BTC.D) suggests clear signals for potential market shifts. Currently, BTC Dominance stands at around 61.20%, following a trendline that has rejected every attempt to break above.

Key instances, marked by arrows, show where dominance levels tested this trendline, reacting to broader market dynamics. The Stochastic RSI (Stoch RSI) is climbing, suggesting potential overbought conditions.

Source: TradingView

Meanwhile, the recent $156.8 million net outflow from U.S. Spot Bitcoin ETFs suggests a possible reversal in dominance. This outflow could indicate a shift in investor sentiment, possibly diverting interest towards altcoins, which traditionally happens when BTC.D declines.

If the Stoch RSI’s overbought conditions lead to a correction, we might see further declines in BTC.D, potentially benefiting altcoins as capital diversifies. This would support BTC’s SOPR signal, which has flashed a sell alert.

Alternatively, if BTC maintains its dominance above the critical trendline, it could defy the current sell signals and sustain market control.

This could potentially drive its price upwards if investor sentiment stabilizes and capital flows back into Bitcoin.