Bitcoin Near ‘Euphoria’ Boundary: What Happens After A Breach?
27 Junio 2024 - 12:00AM
NEWSBTC
On-chain data shows Bitcoin is trading near a level that has
historically acted as the boundary for the ‘euphoria’ phase of the
market. Bitcoin Is Not Far From This Long-Term Holder Cost Basis
Level According to the latest weekly report from Glassnode, BTC’s
recent consolidation has been near the historical boundary between
the ‘equilibrium’ and ‘euphoria’ phases of the bull market. Related
Reading: Ethereum Price Tied To BitMEX Whales: Quant Uncovers Link
The level in question multiplies the Realized Price for the
long-term holders. The Realized Price here refers to an on-chain
metric that, in short, keeps track of the average cost basis of the
investors on the Bitcoin network. When the cryptocurrency’s spot
price is higher than this indicator, the investors can be assumed
to be holding a net amount of unrealized profit. Similarly, the
asset’s value under the metric could suggest the dominance of
losses on the blockchain. In the context of the current topic, the
Realized Price, specifically for the “long-term holders” (LTH), is
of interest. The LTHs refer to the Bitcoin investors who have held
onto their coins for more than 155 days without having
sold/transferred them on the network. Now, here is a chart that
shows the trend in the Realized Price of the LTHs, as well as a
couple of its multiples, over the past decade: As displayed in the
above graph, the Bitcoin LTH Realized Price is trading around
$21,800 right now. This is significantly lower than the current
spot price of the asset, so this cohort would be holding
considerable profits currently. Statistically, the longer an
investor holds their BTC stack, the less likely they become to sell
the coins at any point. As such, the LTHs, who tend to hold for
long periods, include the most resolute holders in the market. This
group doesn’t react easily to market events, like rallies or
crashes. That said, when their gains grow very large, even these
HODLers start getting tempted by the allure of profit-taking.
Historically, this has happened as the Bitcoin market has
approached the ‘euphoria’ phase. Glassnode defines it as that
market phase when the price breaks above the 3.5x multiplier of the
LTH Realized Price. This level currently stands at $76,400, just
above the consolidation range the cryptocurrency has recently been
stuck in. The chart shows that during the past two bull runs, the
asset’s price blew up when it broke past this level. Related
Reading: This Historical Ethereum Top Signal Is Yet To Appear This
Cycle It remains to be seen how long Bitcoin takes to breach this
boundary to escape from the current ‘equilibrium’ phase and fill
investors with euphoria. BTC Price Bitcoin has declined toward the
lower end of its consolidation range during the past few weeks, as
its price is now trading around $61,000. Featured image from
Dall-E, Glassnode.com, chart from TradingView.com
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