Bitcoin (BTC) recently dropped 11% between Jan. 7 and Jan. 9, breaking below the $92,000 mark for the first time in nine days. This decline led to the liquidation of $257.5 million in leveraged long positions and coincided with strong economic data, profit-taking, and uncertainty surrounding geopolitical developments.

Despite the bearish momentum, three key metrics hint that $92,000 could mark a local bottom, offering a potential entry point for investors.

📉 Metric #1: SOPR Drop Suggests a Price Bottom

The Spent Output Profit Ratio (SOPR) fell to 0.98 on Jan. 10, indicating short-term holders are selling at a loss.

Key Insight: SOPR values below 1 typically signal capitulation, hinting at a market bottom.

Historical Context:

In August 2024, a SOPR drop to 0.90 preceded a 31% recovery to $65,103.

In November 2024, a SOPR dip below 1 preceded a 62% rally to all-time highs above $108,000.

The current SOPR levels suggest a potential buying opportunity, as some investors view the $92,000 range as a major support zone.

📊 Metric #2: Entity-Adjusted Dormancy Flow Turns Bullish

The Entity-Adjusted Dormancy Flow indicator dropped to 210,000 on Jan. 9, below the critical threshold of 250,000, signaling a historical "buy zone."

Historical Significance:

In July 2021, similar levels preceded a new bull run that pushed Bitcoin to $69,000.

A breakout above 250,000 often marks the beginning of significant price recoveries.

With the metric now flashing green, Bitcoin could recover from its $92,000 bottom and aim for new highs.

📈 Metric #3: Long-Term Holder Distribution Peaks

The percentage of Bitcoin supply held by long-term holders (LTHs) recently hit its lowest level since December 2024, indicating distribution activity.

Key Insight: LTH distribution has likely peaked, transitioning the market from a distribution phase to an accumulation phase.

Historical Context: Price increases often follow LTH distribution peaks, as seen in previous market cycles.

🚀 What’s Next for Bitcoin?

While Bitcoin’s recent drop has caused concern, these three metrics suggest the worst may be over:

SOPR levels indicate short-term capitulation.

Dormancy Flow highlights a historical buy zone.

LTH supply dynamics align with potential market bottoms.

Investors are closely watching the $92,000 range as a critical support level. If these metrics hold true, Bitcoin could be poised for a strong recovery, potentially setting the stage for another bull run.

$BTC

💬 What’s your take on Bitcoin’s price action? Let us know below! 👇