The True Market Mean Price of Bitcoin is $29,700
According to on-chain data, the true market mean price of Bitcoin is currently valued at $29,700. This holds significant importance for the cryptocurrency.
BTC Trades Below True Market Cost Basis
In a recent post by Glassnode’s lead on-chain analyst, known as “Checkmate,” it was highlighted that the current BTC price trades below the true market cost basis.
Understanding Market Cost Basis
The market cost basis refers to the average price at which investors in the sector purchased their coins. One way to calculate this is through the realized cap, which measures the total value of the cryptocurrency based on its last transferred price on the blockchain.
Issues with Realized Price Calculation
However, this method has flaws due to a portion of the circulating Bitcoin supply being permanently inaccessible. This inactive supply would have traded long ago, leading to a shallow cost basis compared to today’s prices. Including this in the metric skews its value away from reality.
A New Methodology: Cointime Economics
To address these issues, Checkmate and Ark Invest’s David Puell developed a new methodology called “Cointime Economics.” It discounts the impact of lost supply and amplifies economic impacts on the active supply.
The True Market Mean Price Chart
A chart displaying the trend in Bitcoin’s true market mean price based on this advanced model shows that it currently stands at $29,700.
Potential Bullish Momentum
Historically, significant breaks above this indicator have resulted in sustained bullish momentum for Bitcoin.
AVIV Ratio Z-Score Data
The AVIV Ratio Z-Score data, attached to the same chart by Checkmate, tracks the deviation from the true market mean that BTC is currently experiencing.
Potentially Profitable Buying Points
Although the near-term outcome of the price is uncertain, in the long term, Bitcoin could revert back to its mean. This suggests that current price levels may present profitable buying opportunities.
Current BTC Price
As of now, Bitcoin is trading at approximately $27,500, experiencing a 3% decline in the past week.
Hot Take: Bitcoin’s True Market Mean Price Reveals Potential Buying Opportunity
The true market mean price of Bitcoin is currently valued at $29,700. This means that the cryptocurrency’s spot price is trading below its actual worth. Historical data suggests that significant breaks above this indicator have resulted in sustained bullish momentum. Although the short-term outcome is uncertain, in the long term, Bitcoin could potentially revert back to its mean, making the current price levels potentially profitable buying points.
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