The analysis indicates that Bitcoin may have entered a bullish turnaround
Bitcoin (BTC) may have already entered the bullish turnaround of the current cycle, according to a recent analysis by CryptoQuant analyst and trader Yonsei Dent.
Dent made these confirmations based on indications from the aSOPR at 400DMA and the Bitcoin Bid in Profit ratio.
He suggested that by observing the aSOPR at the 400-day moving average and the bid in profit (%), it could be determined whether the market had entered a transition period from a bottom to an uptrend. The aSOPR at 400DMA calculates share adjusted profit margin with a 400 day moving average and provides insight into the trend and the overall health of the market.
The Profit Share (%) indicator is based on the idea that the percentage of profits held by asset owners will change as the market moves from one stage to the next. By analyzing the profit ratio, traders can determine whether a market is in a bull market phase (uptrend), a bear market phase (downtrend), or a transitional phase between the two.
According to Yonsei, the scale indicates three market phases: the euphoria phase with a value greater than 80%, the transition phase with a value between 55% to 80%, and the bottom discovery phase with a value less than or equal to 55%. The Yonsei chart shows that Bitcoin has passed the bottom discovery phase and is currently in the transition phase.
Compared to the 2019 cycle, this may indicate that an uptrend is imminent. However, Yonsei acknowledged that with the 2015/16 low, supply in earnings fell further after entering the transition phase, leading to a more extended bottoming period.
He believes that the current market trend, as evidenced by the aSOPR of the 400DMA reaching a low in the previous cycle, indicates that further declines are unlikely. However, he advised caution, as he revealed that the market trend could get worse.
Moreover, Pantera Capital’s latest Bitcoin issue is consistent with Yonsei’s analysis, as the hedge fund believes that BTC is indeed entering a bull market. Aurelien Ohayon, analyst and CEO of Xorstrategy, also confirmed that the market is in the beginning phase of a bull run, pointing to a similar pattern to the 2019 cycle.
Bitcoin price movements
Meanwhile, bitcoin is still in the hands of the bears as of press time, and they have been trapped by the recent bounce from the previous week. The asset is down 1.33% over the past 24 hours and is currently trading at $21,579 at the time of the report. Bitcoin is on track to print a second consecutive losing session after ending Sunday with a slight drop of 0.36%.
Analyst Michaël van de Poppe highlighted the recent bearishness of the asset, predicting further declines, which will eventually lead to the final phase of the ongoing correction. He revealed that BTC needs to hold above the $20,500 region to engineer a return that would lead to a recovery.