Bitcoin might have entered the bull transition phase, analysis suggests

Bitcoin (BTC) might have already entered the bull transition phase for the current cycle, according to a recent analysis by CryptoQuant analyst and trader Yonsei Dent.

Dent made these assertions based on indications from the aSOPR at the 400DMA and bitcoin’s percentage supply in profit.

He proposed that by observing the adjusted Share of Profit Ratio (aSOPR) at the 400-day moving average and the supply in profit (%), it can be determined if the market has entered a transition period from a bottom to an uptrend. The aSOPR at 400DMA calculates the adjusted share of profit ratio at the 400-day moving average and provides insight into the trend and overall health of the market.

The share in profit (%) indicator is based on the idea that the percentage of profit held by the asset holders will change as the market moves from one phase to another. By analyzing the profit percentage, traders can determine whether the market is in a bull market phase (uptrend), a bear market phase (downtrend), or a transition phase between the two.

According to Yonsei, the metric signals 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%. Yonsei’s chart reveals that bitcoin has passed the bottom discovery phase and is currently in the transition phase.

Compared to the 2019 cycle, this could indicate that the bull run is imminent. Nonetheless, Yonsei acknowledged that, with the 2015/16 bottom, the supply in profit dipped further after entering the transition phase, leading to a more extended bottom period. 

He believes that the current market trend, as indicated by the aSOPR at 400DMA reaching the previous cycle’s low, suggests that further declines are unlikely. However, he has advised caution, as he revealed that the market trend could worsen. 

Moreover, Pantera Capital’s latest publication on bitcoin aligns with Yonsei’s analysis, as the hedge fund believes BTC is already entering a bull market. Analyst and CEO of Xorstrategy Aurelien Ohayon also asserted that the market is at the beginning stage of a bull run, citing a similar pattern to the 2019 cycle.

Bitcoin’s price movements 

Meanwhile, BTC remains in the grasp of the bears as of press time, caught up in the recent retracement that spilled from the previous week. The asset has declined by 1.33% in the past 24 hours, currently trading for $21,579 at the reporting time. Bitcoin is on track to print a second consecutive losing session after ending Sunday with a meager 0.36% decline.

Analyst Michaël van de Poppe highlighted the asset’s latest bearish situation, forecasting further dips, which would eventually lead to the latter stage of the ongoing correction. He disclosed that BTC needs to hold above the $20,500 region to engineer a comeback that would trigger a recovery.