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As bitcoin experiences a gradual recovery in its price performance, new analysis sheds light on the broader stance of the cryptocurrency market.
A CryptoQuant analyst known as “Crazzyblockk” recently shared an in-depth analysis study on bitcoin's quarterly performance, focusing on key metrics such as the asset's market capitalization and realized capitalization.
According to the analyst, examining these metrics each quarter can offer valuable information about long-term trends and possible future price movements.
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Current market signals resemble 2021 boom
The analysis highlights how fluctuations in bitcoin market capitalization and realized capitalization indicate bullish and bearish trends over time. Market capitalization refers to the total value of all btc in circulation, while realized capitalization measures value based on the price at which each bitcoin last moved.
Historically, when market capitalization grows faster than realized capitalization, it often signals the beginning of selling pressure, leading to bear markets. On the contrary, when the market capitalization decreases while the realized capitalization remains stable or increases, bitcoin tends to find its lowest price, indicating possible buying opportunities.
Crazzyblockk's analysis parallels the current bitcoin market situation and behavior during the 2021 boom. During that period, the rapid growth in market capitalization generated significant selling pressure and eventually corrected prices.
According to the analyst, bitcoin is currently in a similar situation. While market capitalization has seen a notable increase, realized capitalization continues to rise, indicating the possibility of another major price correction on the horizon.
The analyst's study also notes that sustained growth in realized capitalization, without corresponding support from market capitalization, tends to trigger corrections as investors realize their profits.
This phenomenon is particularly relevant in the current market environment, where the price of bitcoin has increased in recent months but faces challenges in maintaining its upward trajectory. Crazzyblockk warns that a correction may be inevitable if bitcoin's market capitalization cannot maintain its current levels.
bitcoin Market Performance
Meanwhile, bitcoin appears to be seeing a cooling off of the positive price performance previously seen in recent weeks. So far, the asset has risen almost 10% in the last 14 days, reclaiming major highs and even approaching the $70,000 price mark with a high of $69,227 seen yesterday.
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However, the performance of bitcoin in the last day suggests a cooling of this price increase. During this period, bitcoin had fallen below $67,000 with a current trading price of $66,980.
Regardless of this price correction, some analysts remain optimistic. In particular, a renowned crypto analyst known as Mustache on x.com/el_crypto_prof/status/1848654251645407304″ target=”_blank” rel=”nofollow”>mail that “bitcoin has broken out of a decline channel that has been in place for over 7 months.”
The analyst added that this price action is “reminiscent” of 2020 before the rally. Commenting on the current btc decline, the analyst said: “Are the bears celebrating a new test? They will be surprised soon.
Featured image created with DALL-E, TradingView chart
