Bitcoin has lost momentum, but that doesn't mean the end of the bull market
According to blockchain analysts, the euphoric momentum of Bitcoin's bull market is waning on various metrics.
On Tuesday, Reflexivity Research co-founder Will Clemente noted , that the price of Bitcoin, which at the time of writing is down 0.8% to $65,120, is approaching “the holder's short-term cost base” of $63,800. This indicator tracks the average price at which recent investors have purchased BTC.
Clemente commented: “We do not want to see consecutive days closed below this level. It usually serves as a critical line for market trends".
In a report published the same day, on-chain analytics firm CryptoQuant said the price realized for short-term holders was actually higher – $65,800 – indicating that Bitcoin it has already broken this support level.
Short-term holders are theoretically more prone to panic selling when their investment dips slightly, making their realized price a key line of support. If this line is lost, it can lead to rapid and serious losses.
For example, the last time Bitcoin lost this support line was in early May, when the price quickly fell 8% to below $57,000. At current prices, an 8% drop would send Bitcoin down to $60,000.
CryptoQuant's Bull/Bear Market Indicator currently shows that “the bull market” in Bitcoin has lost some of its momentum, although the rally continues.
Julio Moreno, Head of Research at CryptoQuant, stated: “The total realized price is $30.400". This metric tracks costs for all Bitcoin holders, including long-term investors.
Moreno added: “Comparing the realized price to the market price, we see that the market price is approximately 2.18 times the realized price (MVRV ratio), indicating that we are in the middle of a bull market. Typically, price peaks are seen at an MVRV ratio of 4.0 or higher."
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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