Analyze Bitcoin’s Euphoric Momentum with On-Chain Metrics
The Bitcoin bull market is showing signs of weakening based on blockchain analysts’ insights. Here’s a deeper dive into the latest on-chain metrics:
Bitcoin Price: A Close Look at Short-Term Holder Cost Basis
As a crypto reader, you may find it interesting to note the following points regarding Bitcoin’s current price and short-term holder cost basis:
- Bitcoin’s price is down 3% to $64,500, nearing the short-term holder cost basis of $63,800.
- The cost basis represents the average price at which recent investors purchased Bitcoin.
- A trendline breach below this cost basis could signal a significant shift in momentum.
Realized Price Insights for Short-Term Holders
According to on-chain analytics firm CryptoQuant, the realized price for short-term holders stands at $65,800, indicating a loss of support at this level:
- Short-term holders are more prone to panic selling when their investments dip.
- A breach of the realized price could lead to rapid losses in Bitcoin’s value.
- Historical data shows that losing this support level in May triggered an 8% price drop.
Diminishing Demand Signals in the Bitcoin Market
Further, there are various signals indicating diminishing demand from new investors in the Bitcoin market:
- Miners are still selling their coins, impacting market liquidity.
- Tether’s market cap growth has slowed down significantly.
- Bitcoin whales are accumulating coins at a slower pace compared to previous months.
CryptoQuant’s Bull/Bear Market Indicator
CryptoQuant’s metric suggests that Bitcoin is still in a bull market, albeit with low bullish momentum:
- The overall realized price is $30.4K, indicating Bitcoin’s overall cost basis.
- The MVRV ratio, comparing market price to realized price, suggests Bitcoin is halfway through the bull market cycle.
- Historically, price peaks occur when the MVRV ratio exceeds 4.0.
Hot Take: Assessing Bitcoin’s Market Position
As a crypto enthusiast, understanding on-chain metrics is crucial for analyzing Bitcoin’s market trends and potential price movements. Stay informed and be prepared for shifts in market sentiment based on these key indicators.
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