Bitcoin is expected to see a “significant rise” if it consolidates above $27,900. The level coincides with the MVRV indicator for short-term market participants, according to CryptoQuant analyst Maartunn.
The historical interaction between Bitcoin price and short-term holder realized price (cost basis) has been quite intriguing.
Currently, Bitcoin is steadily approaching this level (at $27,900), and I anticipate a significant price surge once it surpasses it. pic.twitter.com/L7TVOO7Jf3
— Maartunn (@JA_Maartun) October 8, 2023
The specialist drew attention to the historical relationship between the two parameters. After the price overcame the resistance in the form of MVRV_STH, significant growth waves were observed.
Bitfinex analysts pointed to a continued decline in the number of coins at the disposal of speculators to a minimum in almost eight years. Hodlers, on the contrary, increased the number of coins in their wallets to a new record.
“The gap has gotten worse over the last couple of weeks. Many short-term holders made minor profits or minimized losses as Bitcoin returned to $28,500. [сопоставимо со средним уровнем „себестоимости”]”, – they explained.
Experts looked at various market cycle indicators and concluded that digital gold has bottomed out. One of them was the indicator of the dominance of stablecoins (their total market value relative to the capitalization of the market as a whole). The reduction in the supply of “stable coins” indicates their conversion into digital assets, analysts explained.
Currently, the metric has dropped to the 11–11.4% zone, which historically served as a signal for the subsequent recovery of Bitcoin. The signal reinforces the forecast for increased volatility, according to experts.
Pending approval could be potential driver of rally SEC spot bitcoin ETFs. Matrixport estimates that investors could invest up to $20-30 billion in the new product.
Analysts emphasized that at the moment the capitalization of digital gold is equivalent to 10.8% of its physical counterpart. Market participants invested ~$200 billion in the latter’s exchange-traded funds.
Experts also justified their forecast by the lack of risk of confiscation for Bitcoin compared to the precious metal.
“Stocking assets in bullion has not only become unfashionable, but also comes with significant cross-border restrictions. The first cryptocurrency offers a solution to this dilemma by allowing funds to be moved quickly and relatively quietly. Its main role is to act as a store of value, akin to gold, and a speculative financial asset.” – the report says.
Previously, BitMEX co-founder Arthur Hayes admitted that in 2024 the price of the first cryptocurrency would reach $70,000. He justified his forecast, among other things, by the prospect of approval of spot Bitcoin ETFs.
Let us recall that ex-BlackRock director Stephen Schonfield suggested that the SEC would approve the instrument within three to six months.
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