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4 indicators suggest that the price of bitcoin will be adjusted – but can BTC hit $ 20K first?

The decrease in the price of bitcoin (BTC) is probably based on several points in the data in the chain, namely the Spent Output Profit Ratio (SOPR), stable inflows, ordered orders to sell for $ 19,000 and an index of crypto and fear. However, the question remains when this correction would occur.

Recover profits at the lowest possible purchase pressure

The SOPR indicator essentially measures how profitable bitcoin holders are at the moment. When SOPR is high, BTC is at risk of returning a profit, as traders tend to sell when they have a profit.

Corrected bitcoin SOPR. Source: Glassnode

Meanwhile, the influx of stable coins shows how many stable coins, such as USDT Tether, flow into the exchanges. When the inflow of stable currencies increases, it usually means that the demand for buyers increases. On the other hand, the pressure on sales tends to increase when BTC reserves outpace the inflow of stable coins.

In the last few days, the SOPR indicator has reached a level that previously led to the price of bitcoin adjusting, such as at the end of 201

8 and the summer of 2019.

On November 20, Rafael Schultz-Kraft, Chief Technical Officer at Glassnode, noted:

“Corrected SOPR (per hour, 7d MA), as high as it has not been since July 2019. Incoming correction?”

This trend could become disturbing if Bitcoin’s momentum slows down. Renato Shirakashi, the creator of the SOPR indicator, said that the work of Nobel laureate Daniel Kahneman shows that investors feel comfortable selling when they win.

Therefore, if Bitcoin freezes or consolidates in the near future below the resistance of $ 19,000, a slight withdrawal may occur. Shirakashi wrote:

“People in general are much more comfortable selling when they make a profit. In a bullish market, when the SOPR falls below 1, people will sell at a loss and thus are reluctant to do so. This pushes supply significantly down, which in turn puts upward pressure on the rising price. “

The increase in the ratio of exchange-stable coins from CryptoQuant coincides with the growing SOPR. The ratio of stable coins is the exchange reserves of bitcoins, divided into reserves of stable coins. As it increases, this indicates that the potential pressure on sales increases.

Stable coin ratio for BTC. Source: CryptoQuant

As such, CryptoQuant’s CEO, Ki Young Ju, expects a short-term, though not large, correction in the short term. He noted:

“BTC’s potential sales pressure is increasing, but still low. We will see some correction in a few days, but it will not be big. Long-term bullish. “

$ 19,000 set a new all-time record

Stock market order books also show that the $ 19,000 level has become an important zone of resistance. There are significant sales orders at Bitfinex, Bitstamp, Binance and Coinbase for nearly $ 19,000, which could prevent the rally from continuing.

Another possible factor that can cause short-term withdrawal is the Crypto Fear and Greed index. The index is still at dangerously high levels, which increases the likelihood of a correction.

The adjustment may come later

However, in the last few months, bitcoin reserves on stock exchanges have been steadily declining, according to Cointelegraph. This can compensate for a large adjustment for the whole market, especially if the BTC bit accelerates the activation of FOMO, which means a large influx of new buyers.

To date, Glassnode has found that the balance of bitcoin on stock exchanges has decreased by 18% The steady decline in foreign exchange reserves reduces the likelihood of deep declines, which analysts, such as Ki, constantly emphasized in November.

Bitcoin exchange balance 90-day moving average. Source: CryptoQuant

There are also other factors that could delay the correction until after Bitcoin breaks $ 19,000 or potentially even $ 20,000.