A rare bullish crossover between two on-chain metrics could soon be forming for bitcoin. This is when this analyst believes the crossover would occur.
bitcoin Realized Prices of Two UTXO Age Bands Are Moving Towards a Cross
As explained by an analyst at CryptoQuant Quicktake bitcoin-is-expected-to-experience-pressure-from-new-buyers-on-November-28-2023″ target=”_blank” rel=”nofollow”>mail, a bullish crossover for btc is expected to occur soon. The indicator of interest here is the “realized price,” which basically tracks the price at which the average investor in the bitcoin market purchased their coins.
The indicator calculates this value by reviewing the on-chain history of each coin in circulation to see what price the last transaction was made at. The metric assumes that this price is your purchase price and therefore after taking the average of this value for all tokens on the network, you get the basis of the average cost of all coins.
When the cryptocurrency price is below this metric, it means that the average holder in the sector is in a state of loss. On the other hand, a price above the indicator implies that the overall market is enjoying net gains.
The realized price of the entire user base is not relevant in the context of the current discussion, but rather two specific UTXO age bands which are 6 months to 12 months and 12 months to 18 months. What these age ranges mean is that the coins (or more accurately, the UTXOs) that belong to them last moved within their range.
Now, here is a chart showing the trend in the realized price of bitcoin for these two UTXO age bands over the past few years:
<img decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2023/10/This-Rare-Bitcoin-Bullish-Crossover-Could-Form-Soon-Quant-Predicts.png" alt="Realized bitcoin Price” width=”1192″ height=”505″ loading=”lazy” data-recalc-dims=”1″/>
Looks like the the two metrics have been approaching each other in recent days | Source: bitcoin-is-expected-to-experience-pressure-from-new-buyers-on-November-28-2023" target="_blank" rel="nofollow">CryptoQuant
As shown in the chart above, the realized price of UTXOs that were dormant between 12 and 18 months ago has been declining for some time now. The 6-12 month age group had shown a similar trajectory earlier in the year, but a while ago, the metric plateaued and has since changed.
The reason the average cost basis of investors belonging to this age group has reversed course is that the 6-month limit for the group now falls in April, meaning those who bought during the rally in first months of the year would now be counted in this cohort.
At the beginning of the year, bear market buyers were part of the group, so the average naturally went down. On the other hand, the 12 to 18 month group continues to constitute these bear market buyers, hence their realized price continues to decline.
If these two metrics continue on their current trajectories, they will go through a crossover. As highlighted in the chart, such a crossover where the 6-month to 12-month band has surpassed the 12-month to 18-month cohort has historically proven to be bullish for the asset.
In total, there have only been four such crossovers in the entire history of cryptocurrency, so if this crossover continues to form, it would be only the fifth in history. The analyst believes that November 28, 2023 is when this bullish crossover could be expected to form for bitcoin.
btc Price
bitcoin had made an effort towards the $29,000 level yesterday, but it appears that the rally has now calmed down as the coin has retreated towards $28,400.
<img decoding="async" class="alignnone size-medium aligncenter" src="https://www.tradingview.com/x/hnzcK6CQ/" alt="bitcoin price chart” width=”1534″ height=”869″ loading=”lazy”/>
btc appears to have overall moved sideways in the last two days | Source: BTCUSD on TradingView
Featured image from Shutterstock.com, Charts from TradingView.com, CryptoQuant.com
