Bitcoin News Today: Bitcoin Traders Brace for Potential 20% Drop as SOPR Nears 1.02

Bitcoin traders are on high alert as the cryptocurrency's Spent Output Profit Ratio (SOPR) nears a critical level of 1.02, which has historically triggered significant pullbacks. At the time of writing, Bitcoin's 90-day SOPR has climbed to 1.018, approaching the historically critical 1.02 level that previously led to sharp drops in March 2024 and February 2025. Each time the SOPR crossed into the 1.02–1.03 zone, Bitcoin experienced 10–20% drops within two weeks. This pattern reflects a zone of intense profit-taking pressure, and if SOPR continues to rise, the market may face similar sell-side volatility.

Despite the potential for a pullback, there are signs of cautious optimism. Bitcoin’s Open Interest-Weighted Funding Rate has turned increasingly positive since early July, suggesting growing bullish bias among derivatives traders. However, Funding Rates have remained relatively stable, without extreme spikes, which suggests measured optimism rather than outright euphoria. Additionally, exchange outflows have remained negative, with a 2.35% drop reflecting consistent outflows totaling over 31K BTC. This trend highlights that investors continue withdrawing coins, likely for self-custody or long-term holding, which challenges the bearish SOPR implications and suggests deeper accumulation in play.

However, the sustainability of current price levels is also being questioned. Both the Network Value to Transactions (NVT) and Network Value to Metcalfe (NVM) ratios have seen significant declines, with NVT down 11.21% and NVM down 16.21%. These metrics gauge valuation against transactional activity and network adoption, respectively. A drop in both ratios often implies that price is rising faster than underlying utility or user growth. Therefore, despite bullish narratives around ETFs and macro tailwinds, the drop may suggest waning transactional demand. If this divergence persists, it could undermine the sustainability of current price levels. However, a reversal in these ratios could also signal a renewed phase of organic network strength.

Traders are closely monitoring the situation, as any surge in SOPR or funding could flip sentiment quickly and ignite volatility in the short term. The next move could test whether bulls have the strength to absorb renewed selling momentum. If bullish momentum holds and leverage stays controlled, the market could avoid another sell-off. However, if the SOPR crosses 1.02 and funding surges simultaneously, a violent unwinding could follow. Therefore, traders may look to hedge against overleveraged conditions brewing under the surface.