Blockchain analysts suggest that the bullish momentum of Bitcoin’s bull market is weakening, based on various indicators.
On Tuesday, Will Clemente, co-founder of Reflexivity Research, noted that the price of Bitcoin had dropped 0.8% to $65,120, nearing the “short-term holder’s cost basis” of $63,800. This indicator tracks the average price at which recent investors purchased Bitcoin.
Clemente commented, “We don’t want to see consecutive closes below that level. It typically acts as a key line in the sand for market trends.”
In a report released on the same day, on-chain analytics firm CryptoQuant stated that the realized price by short-term holders was actually higher at $65,800, indicating that Bitcoin had already broken through this support level.
In theory, when short-term holders see a slight decline in their investments, they are more prone to panic selling, making their realized price a crucial support line. Losing this line could lead to rapid and significant losses.
For example, the last time Bitcoin lost this support line was in early August, when the price plummeted by 57% to $8. At the current price, a 60% drop would bring Bitcoin down to $XNUMX.
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CryptoQuant’s Bullish/Bearish indicator currently shows “bullish” despite the ongoing rebound, but Bitcoin has lost some momentum.
Julio Moreno, Head of Research at CryptoQuant, stated, “The total realized price is $30,400.” This indicator tracks the costs of all Bitcoin holders, including long-term investors.
Moreno added, “Comparing the realized price with 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 reaches 4.0 or higher.”