After starting the week with a sharp decline from around $78,000, Bitcoin price appears to have found stability Approximately $73,500. However, a recent on-chain evaluation suggests that if a condition is not met, this newfound stability may just be the typical calm before the storm.
The main support for Bitcoin is around $72,400
Cryptocurrency analyst Darkfost recently took to social media platform X in a post on May 29 Highlight A critical development in the dynamics of the Bitcoin chain and its impact on the foundation. The relevant indicator here is the “realized price excluding 7-year supply” measure.
For context, the metric tracks the average acquisition cost of all bitcoins that have moved in the past seven years, excluding long-term dormant coins, to reflect the cost basis for active market participants only.
When Bitcoin trades above this level, it often means that the most active Bitcoin holders are doing so while enjoying the profits. In this case, there is less possibility of random panic-driven selling occurring.
On the other hand, when the price of Bitcoin remains below this key level for an extended period, it has historically indicated that active Bitcoin holders are likely to experience pressure, as they lock in unrealized losses. Normally, this scenario could be dangerous for the price of Bitcoin, as investors are increasingly inclined to sell their shares, Either to cut losses Or to break even.
Source: @Darkfost_Coc on X
According to Darkfost, the real price for active Bitcoin holders is around $72,400. Interestingly, the price of Bitcoin has been rising recently It fell below this support level Before reversing and starting to consolidate near $73,500.
From DarkFost’s point of view, a drop below the achieved price mentioned above is actually a typical pattern for bear markets. However, the cryptocurrency expert explained that this break below the key support level must be confirmed before any news of a downtrend can be considered real.
Hence, the major cryptocurrency’s near-to-medium term future depends on how it moves in the short term. If Bitcoin can build upward momentum from its current consolidation, prices will immediately remain clearly above the average cost basis of its investors.
Conversely, if Bitcoin price definitively closes below $72,400, the major cryptocurrency could quickly enter a bearish phase, triggered by a mass sell-off that would likely follow. This means that market participants should monitor BTC price movement around this key level before making financial decisions.
Bitcoin price at a glance
As of this writing, Bitcoin is at around $73,540, reflecting a 0.4% decline over the past 24 hours.
The price of BTC on the daily timeframe | Source: BTCUSDT chart on TradingView
Featured image from iStock, chart from TradingView
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