Bitcoin’s On-Chain Metrics Indicate A Potential Bullish Shift: Bitcoin could be on the brink of a significant bullish crossover, as indicated by two specific on-chain metrics. An expert sheds light on when this anticipated crossover might materialize.
Understanding the ‘Realized Price’: The ‘realized price’ is a unique metric that captures the average acquisition price of Bitcoin by investors. By delving into the on-chain history of each circulating coin, this indicator determines the last transaction price, assuming it to be the purchase price. Consequently, an average cost basis for all coins is derived.
When Bitcoin’s price falls below this metric, it suggests that the average holder is at a loss. Conversely, a price above this indicator indicates net profits for the market.
While the realized price for the entire Bitcoin community is not the focal point here, two specific UTXO age bands are: 6 months to 12 months and 12 months to 18 months. These bands represent the last movement of coins (or UTXOs) within their respective ranges.
Trends in Bitcoin’s Realized Price: Historical data reveals that the realized price for UTXOs dormant between 12 and 18 months has been on a decline. However, the 6-month to 12-month band, after an initial decline, has stabilized and is now on an upward trajectory.
This shift can be attributed to the inclusion of buyers from the early-year rally into the 6-month to 12-month cohort. Previously, this group was dominated by bear market buyers, causing the average to dip. The 12-month to 18-month cohort still encompasses these bear market purchasers, explaining its continued decline.
Should these metrics maintain their current paths, a crossover is imminent. Historically, a crossover where the 6-month to 12-month band surpasses the 12-month to 18-month group has been a bullish sign for Bitcoin.
Such crossovers are rare, with only four occurrences in Bitcoin’s history. If this trend materializes, it would mark the fifth such event. Expert analysis predicts this bullish crossover might take place around November 28, 2023.
Bitcoin’s Current Price Movement: Bitcoin recently aimed for the $29,000 mark but has since settled around $28,400 after a slight retraction.
