Coming Bitcoin Rally to $70k?
The analyst with the alias ‘Avocado Onchain’ highlights past occasions when Bitcoin's price broke through or was rejected by these short-term holders' average purchase price.
The expert suggests tracking this average purchase price to predict Bitcoin's future.
The data shows that Bitcoin's average purchase price among holders who have held their holdings for 1-3 months has regularly affected its price.
Bitcoin's bullish trend frequently begins when it breaks this average purchase price. When the average purchase price serves as resistance, a bearish trend may commence.
Avocado noted that Bitcoin hit $73,000 earlier this year before falling. Bitcoin failed to exceed the average purchase price of these short-term holders, causing a negative trend, according to the expert.
This trend implies that short-term holders' average purchase price may be a credible on-chain market sentiment barometer.
As Bitcoin's price hits certain levels, momentum tests may confirm or reverse the market trend.
Bitcoin is gradually rising after the US fed rate decrease yesterday. Since yesterday, the asset has risen 5.8% to $63,054.
Bitcoin is again trying to breach the average purchase price of 1-3 month holders after the U.S. Federal Reserve reduced rates by 50bp.
Crypto specialists are hopeful about Bitcoin breaking over the short-term holder buy price level and causing more upward momentum.
Moustache said that this technical pattern and the recent US interest rate decrease might lead to “legendary” price swings in the coming months.
