On-chain data shows that Bitcoin has broken above these three key levels in a manner reminiscent of the April 2019 rally.
Bitcoin breakout shows early similarities to April 2019 rally.
According to data from an on-chain analytics firm Glass node, BTC has broken above three investor cost base levels for the first time since the COVID-19 crash and the 2018-2019 bear market. The relevant indicator here to understand the concept of is “perceived value”.Realized hat“It needs to be seen first.
Realized cap is a capitalization model for Bitcoin that assumes that the actual price of each coin in the circulating supply is the last traded price, rather than the current BTC price (which the normal market cap uses for its calculation). Keeps as
Now, from the felt cap, a “Value realizedThe metric can be obtained by dividing by the total number of coins in circulation. Since the realized cap takes into account the prices at which investors bought their coins (that is, their cost basis), the actual price can be thought of as the average acquisition price in the market.
This means that if the normal price of Bitcoin falls below this indicator, the average holder can be predicted to enter a loss situation. While this earned value is the average cost basis for the entire market, the metric can also be defined for specific groups of investors.
The BTC market can be divided into two main groups: short-term holders (STHs) and Long-term holders (LTHs). Investors who have purchased their coins within the last 155 days are classified as STHs, while those holding coins before this threshold are classified as LTHs.
Here’s a chart that shows the trend in the actual price of Bitcoin over the past few years for the market as a whole, as well as separately for these two holder groups:
BTC seems to have broken above all these levels recently | Source: Glassnode on Twitter
As the graph above shows, Bitcoin STH broke above the cost base and the price received by the entire market earlier in the latest rally, indicating that the average STH and the overall average investor returned to profit. Is.
In the most recent continuation of the rally, the crypto has now risen above the LTH cost base of $22,400. This means that the average investor in each segment is now in the green.
The last time Bitcoin showed a breakout above all these levels was after the Black Swan COVID-19 crash, which briefly took the coin below these prices.
A similar trend was established in April 2019, when the bear market of the cycle ended, and a bullish transition took place. While it’s too early to tell, this similarity between the two rallies could hint at the path the current one could follow.
At the time of writing, Bitcoin is trading near $22,900, up 8% over the past week.
Looks like BTC has been moving sideways in the last few days | Source: BTCUSD on TradingView
Kanchanara featured image on Unsplash.com, Charts from TradingView.com, Glassnode.com
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