Blockchain analyst states that the optimistic momentum of the Bitcoin bull market is weakening from various indicators.
On Tuesday, Will Clemente, co-founder of Reflexivity Research, noted that the price of Bitcoin had dropped by 0.8% to $65,120, approaching the “holder’s short-term cost basis” of $63,800. This indicator tracks the average price at which investors have recently purchased Bitcoin.
Clemente commented, “We don’t want to see multiple daily closes below that level. It typically serves as a key line for market trends.”
In a report released on the same day, on-chain analysis firm CryptoQuant indicated that the realized price by short-term holders was actually higher at $65,800, suggesting Bitcoin has already broken through this support level.
Theoretically, when short-term holders see a slight decline in their investments, they are more prone to panic selling, making their realized price a critical support line. If this line is lost, it could lead to rapid and severe losses.
For example, the last time Bitcoin lost this support line was in early August when the price rapidly dropped 57,000% breaking below $8. At the current price, a 60,000% drop would bring Bitcoin down to $1.
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Bitcoin price continues to decline: Will the sell-off continue?
CryptoQuant’s bull/bear indicator currently shows that “the bull market, while still rebounding, has lost some momentum.”
Julio Moreno, research director at CryptoQuant, stated, “The total realized price is $30,400.” This indicator tracks the cost basis of all Bitcoin holders, including long-term investors.
Moreno added, “Comparing the realized price to the market price, we see that the market price is about 2.18 times the realized price (MVRV ratio), indicating that we are in a bull market. Typically, price peaks occur when the MVRV ratio is 4.0 or higher.”
