1. Market Data Review: Exchange Inflows and Price Decline
In his latest report, CryptoQuant analyst Axel Adler Jr. highlights that the current Bitcoin correction is more severe than the sell-off event in February. The 30-day average Bitcoin inflow to exchanges has surged to 122,000 BTC, nearly 50% above the annual baseline of 82,000 BTC and significantly higher than the February average of around 80,000 BTC. The metric is approaching the upper bound of 131,000 BTC, indicating sustained selling pressure. Concurrently, Bitcoin's price has fallen from the $77,000-$78,000 range to approximately $59,000, a decline of about 23%.
2. Key Indicator: SOPR Below 1 Reflects Widespread Loss Realization
The 30-day moving average of SOPR (Spent Output Profit Ratio) has dropped to 0.99, staying below the critical level of 1.0. A SOPR below 1 implies that, on average, BTC being sold is doing so at a loss. Adler notes that during May to July, SOPR was below 1 for 37 out of 61 days, representing over 60% of the time. The combination of heavy exchange inflows and loss-making selling makes the current correction a persistent sell-off rather than a brief stress event, making it more pronounced than the February episode.
3. Market Outlook and Risks: Stabilization Signals and Downside Pressure
Adler emphasizes that market stabilization requires two simultaneous signals: a rebound in SOPR above 1 (meaning sellers are no longer losing money) and a drop in exchange inflows back to normal annual levels. The primary risk is that if the volume of BTC continues to flood onto exchanges, supply pressure will persist, making it difficult for market sentiment to improve. Investors should monitor these two indicators closely to judge whether the market is approaching a bottom or remains vulnerable to further downside.