Bitcoin (BTC) Overdue for a Rally as On-Chain Metrics Hit Historic Levels: InvestAnswers
Popular crypto analyst InvestAnswers says an on-chain signal suggests Bitcoin (BTC) is long overdue for a rally.
In a new strategy session, the pseudonymous analyst takes a look at Bitcoin’s realized price (RP) metric, which plots the value of all BTC at the price it was purchased at divided by the number of coins in circulation.
The analyst points out that historically, BTC has not stayed below RP for long.
“We’re counting down to the next halving and here we were below the realized price…it’s been 170 days now and the actual price is below that RP of around $21,000, suggesting a bounce in actual price is coming because we’re not staying so long down here, at least many believe…
This is a rainbow picture of the price achieved. And you can see that bitcoin price is above RP most of the time… It’s about 97% of the time, above 98% of the time. It’s down now. Now the question arises, how does this develop in history?”
Source: InvestAnswers/YouTube
According to the analyst, Bitcoin stayed below the RP for 110 days in 2011, 240 days in 2015, 115 days in 2018, 8 days in 2020, and 170 days so far in 2022, suggesting a BTC rebound is approaching could.
Increasing weakness in the US Dollar Index (DXY) also suggests Bitcoin is poised for a rally, the analyst says. DXY is the USD against a basket of other major fiat currencies and is traditionally thought to be inversely correlated with risky assets like bitcoin and crypto.
“That’s a pretty cool sign because as we know, when DXY goes up, bitcoin goes down and vice versa. They are inversely correlated. If history repeats itself – and we’ve said it a lot lately – this chart signals a possible collapse. But you could also argue that it’s already broken down from 115 to under 109. But here we are again. If that happens, it will be very good for the risky area as well.”
Source: InvestAnswers/YouTube
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