Bitcoin (BTC) Overdue for a Rally As On-Chain Metrics Reach Historic Levels: InvestAnswers

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Pop­u­lar cryp­to ana­lyst Inves­tAnswers says that an on-chain sig­nal is sug­gest­ing that Bit­coin (BTC) is way over­due for a rally.

In a new strat­e­gy ses­sion, the pseu­do­ny­mous ana­lyst takes a look at Bitcoin’s real­ized price (RP) met­ric, which records the val­ue of all BTC at the price they were bought, divid­ed by the num­ber of coins in circulation.

The ana­lyst points out that his­tor­i­cal­ly, BTC has not stayed below the RP for long.

“We’re count­ing down to the next halv­ing and here we’ve been under the real­ized price… it’s now 170 days and the actu­al price is under that RP of about $21,000, sug­gest­ing an upswing in the actu­al price is on the cards because we don’t stay down here that long, at least many believe…

This is a rain­bow visu­al of the real­ized price. And you can see how the Bit­coin price is pret­ty much, most of the time, above the RP… It’s to the tune of like 97% of the time, 98% of the time it’s above that. Now it’s below. Now the ques­tion is, how does that shape up in history?”

Source: InvestAnswers/YouTube

Accord­ing to the ana­lyst, Bit­coin stayed below the RP for 110 days in 2011, 240 days in 2015, 115 days in 2018, 8 days in 2020 and 170 days so far in 2022, imply­ing that a BTC bounce could be approaching.

Also sug­gest­ing that Bit­coin is ready for a ral­ly is the increas­ing weak­ness in the US dol­lar index (DXY), says the ana­lyst. DXY is the USD ver­sus a bas­ket of oth­er major fiat cur­ren­cies and is tra­di­tion­al­ly thought to be inverse­ly cor­re­lat­ed to risk-on assets like Bit­coin and crypto.

“This is a pret­ty cool sign because as we know, as DXY goes up, Bit­coin goes down, and vice-ver­sa. They are inverse­ly cor­re­lat­ed. If his­to­ry repeats – and we’ve said that a lot late­ly – this chart sig­nals a pos­si­ble break­down. But you could also argue it already has bro­ken down from 115 down below 109. But here we are again. If this does hap­pen, this will be very good for the risk-on space as well.”

Source: InvestAnswers/YouTube

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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

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