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Why Bitcoin prices might fall further

Press Releases Crypto News AMB-Crypto Why Bitcoin prices might fall further

BTC’s realized price of short-term holders was poised to fall below market value.
Should this happen, BTC’s price might suffer a further drop in value.

In the current market cycle, an unabated drop in Bitcoin’s [BTC] realized price of its short-term holders put the leading cryptocurrency at risk of a further decline in value, pseudonymous CryptoQuant analyst Crazzyblockk noted in a new report.

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BTC’s realized price refers to the average price that all BTCs were last transacted on-chain. It is calculated by dividing the total value of all BTCs by the number of coins in circulation.

The metric is often deployed toward assessing the overall health of the BTC market.

Rising realized price indicates that investors are buying bitcoins at a higher price, which is a bullish signal. On the other hand, a falling realized price suggests that investors are selling bitcoins at a lower price, which is a bearish signal.

Short-term holders to determine the next price direction?

In its report, the analyst compared BTC’s realized price of short-term holders in the 2019-2020 price cycle and the current price cycle and found that when the realized price of short-term holders fell below the market price in the former cycle, the “maximum loss imposed on short-term holders of 1-6 months was about 40-45%.”

In the current price cycle, the realized price of short-term holders remains above the market price. But it was much closer to the market price than it was in the 2019 price cycle.

The analyst noted that this meant short-term holders are not at as much of a loss as they were in the 2019 price cycle. This was because losses incurred by this investor cohort only ranged from 4% to 9% at press time.

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Author: Abiodun Oladokun

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