Here’s Why Bitcoin Could Break At Least $33,000 In This Rally
04 Abril 2023 - 11:00AM
NEWSBTC
Bitcoin may be able to break the $33,000 mark in the current rally
if this historical pattern of an on-chain indicator is anything to
go by. Bitcoin Realized Price-To-Liveliness Ratio Has A Value Of
$33,200 Currently According to the latest weekly report from
Glassnode, BTC is currently in a range that has historically been
associated with a macro transitional phase. The indicator of
interest here is the “realized price,” which is a value derived
from a Bitcoin capitalization model called the realized cap. Unlike
the usual market cap, the realized cap says that the true value of
a coin in the circulating BTC supply is the price at which it was
last transferred and not the current Bitcoin price. The realized
price is obtained from this model by dividing it by the total
number of coins in circulation. The significance of this price is
that it represents the cost basis (the acquisition price) of the
average holder in the market. This means that if the normal price
dips below this metric’s value, then the average investor in the
sector enters into a state of loss. Naturally, a break above the
level implies a return of profitability for the market. Now, the
realized price makes the lower bound of the aforementioned macro
transitional phase as the worst parts of historical Bitcoin bear
markets have occurred when the price has been below this level. The
below chart shows the trend in this indicator: Looks like the price
is significantly above this level now | Source: Glassnode's The
Week Onchain - Week 14, 2023 As displayed in the above graph,
Bitcoin broke above the realized price earlier in the year when the
ongoing rally first started. This was a signal that the coin had
entered into the transitional period between bearish and bullish
trends. The realized price currently has a value of $19,800, which
means the coin has now taken quite a distance over it. Now, BTC is
not too far from the upper bound of this historical range, which is
made by a metric called the realized price-to-liveliness ratio.
Related Reading: Dogecoin Flips Cardano In Market Cap, Becomes 7th
Largest Crypto This indicator is a modified version of the realized
price that accounts for the degree of HODLing taking place on the
network. As for why this weighting factor is applied to the
realized price, Glassnode explains, “large scale HODLing acts to
constrain supply, increasing the estimated ‘fair value’, and
vice-versa.” Currently, the realized price-to-liveliness ratio has
a value of around $33,200. From the chart, it’s apparent that tops
of bull rallies have historically taken form at or above this
level. The April 2019 rally, with which the current rally shares
many similarities, also saw BTC break above this indicator before a
top was encountered. If these previous instances are anything to
consider, it appears possible that the current rally in the
cryptocurrency will also at least touch the upper bound of this
transitional zone. Related Reading: Bitcoin SOPR Plunges, Why This
Could Be Bullish A retest of this level, however, doesn’t
necessarily have to take place soon. In the 2015-2016 bear market,
the asset spent 234 days in this period before it touched the upper
bound of this zone. The current cycle has so far seen the coin
spend a total of 116 days here. BTC Price At the time of writing,
Bitcoin is trading around $28,300, up 6% in the last week. BTC has
moved sideways recently | Source: BTCUSD on TradingView Featured
image from Kanchanara on Unsplash.com, charts from TradingView.com,
Glassnode.com
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