Bitcoin Could Experience Bullish Shift Based on On-Chain Metrics: There are two specific on-chain metrics indicating that Bitcoin may be on the verge of a significant bullish crossover. An expert offers insights on when this anticipated shift might happen.
Understanding the ‘Realized Price’: The ‘realized price’ is a unique metric that calculates the average acquisition price of Bitcoin for investors. By analyzing the on-chain history of each circulating coin, this indicator determines the last transaction price, assuming it as the purchase price. Consequently, it derives an average cost basis for all coins.
When Bitcoin’s price falls below this metric, it suggests that the average holder is at a loss. On the other hand, a price above this indicator indicates net profits for the market.
Although the realized price for the entire Bitcoin community is not the main focus here, attention is given to two specific UTXO (unspent transaction output) age bands: 6 months to 12 months and 12 months to 18 months. These bands represent the most recent movement of coins within their respective ranges.
Trends in Bitcoin’s Realized Price: Historical data reveals a declining realized price for UTXOs dormant between 12 and 18 months. However, the 6-month to 12-month band, after an initial decline, has stabilized and is now showing an upward trajectory.
This shift is 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 purchasers during the bear market, which caused the average to decrease. The 12-month to 18-month cohort still includes these bear market buyers, explaining its ongoing decline.
If these metrics continue along their current paths, a crossover is imminent. Historically, when the 6-month to 12-month band surpasses the 12-month to 18-month group, it has been a bullish sign for Bitcoin. These crossovers are rare, with only four occurrences in Bitcoin’s history. If this trend continues, it would mark the fifth such event. Experts predict this bullish crossover may happen around November 28, 2023.
Bitcoin’s Current Price Movement: Recently, Bitcoin aimed for the $29,000 mark but has since settled around $28,400 after a slight retraction.
