Recent analysis conducted by CryptoQuant analyst tugbachain sheds light On an important aspect of Bitcoin market behavior – the lifetime distribution of the realized price of UTXO.
This metric plays an important role in understanding the retention patterns of different investor groups and the market’s response to price fluctuations. The realized price, which is calculated as the maximum realized divided by the total supply, is pivotal for determining cost bases between long-term shareholders and new buyers.
According to tugbachain, realized price levels for one-month and three-month periods often serve as critical areas during bull market corrections.
These levels provide a lens through which to analyze market sentiment, especially among small investors, providing insight into the underlying dynamics that drive buying and selling activity.
Key support levels for BTC
The analyst identifies two specific realized price levels – $75,100 and $62,400 – as key cost bases for small investors. These levels are important because they act as support areas during periods of market volatility.
Historically, when Bitcoin’s price tests these levels, it often triggers buying reactions, highlighting the psychological and financial impact these price points have on small investors, Togbachen noted.
The CryptoQuant analyst also points out that these support levels reveal not only the patterns of small investors but also how their actions can be influenced, or even manipulated, in a bull market. In bull cycles, it is common for market dynamics to amplify fear among small investors, often leading to panic selling.
Togbachin concluded by noting:
Monitoring these levels closely can provide valuable insights for making informed investment decisions.
Bitcoin market performance
Meanwhile, Bitcoin has just renewed its all-time highs (ATH). So far BTC has peaked at $94,784. However, at the time of writing, the asset has retreated slightly from this peak with a current trading price of $94,523 albeit still up 3.1% in the past day.
While the asset has seen steady upward momentum in recent weeks, CryptoQuant shared an interesting analysis on whether it’s time to sell or hold BTC in a recent post on its official X account. Citing key key metrics, CryptoQuant reported BTC’s MVRV ratio.
According to the on-chain data provider platform, historically, an MVRV ratio of more than 3.7 indicates that Bitcoin has reached a market high. Fortunately, the latest Data It shows that BTC’s MVRV is still below this level at 2.62 as of November 19.
Bitcoin Reaches ATH: Time to Sell or Hold?
MVRV > 3.7 achieved historical market highs.
Explore these four additional key metrics to better understand market timing and make more informed decisions.
Details below
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— CryptoQuant.com (@cryptoquant_com) November 19, 2024
Featured image created with DALL-E, chart from TradingView
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