- Statistically meaningful wave of profit-taking by short-term investors has halted Bitcoin’s ascent.
- In the coming months expect volatile price swings with a range of +/- 50% around $36,000.
The ‘Roadmap’ of a number of on-chain indicators of ‘fair value’ suggests several months of volatility within +/- 50% around $36,000. Glassnode arrived at such conclusions.
#Bitcoin performed a round-trip this week, rallying to new yearly highs before selling off back towards its weekly open. After such a powerful 2023 thus far, the rally seems to have met resistance, with several indicators suggesting a degree of near-term exhaustion.
Discover… pic.twitter.com/KSnJI3x8Ch
— glassnode (@glassnode) December 12, 2023
Experts justified the position with the realized price metric from the point of view of active investors ?. It is based on the structure Cointime Economics and calculates the ‘fair value’ of digital gold. The chart below also features the classic variant of the indicator ?.
Experts made two observations:
- Historically, the interval between a break above realized price and the ATH update ranged from 14 to 20 months (in 2023, after the first signal, 11 months passed);
- The path to a new ATH has always been accompanied by significant swings within +/-50% of the realized price of active investors (periods highlighted in orange rectangles).
Another dimension of ‘fair value’ could be the NVT Price indicator. Analysts considered the 28-day and 90-day variants of the metric.
In October the faster curve crossed the second from below, signaling a transition to a bull market. The premium (the difference between the indicators) reached a maximum since the ATH in November 2021, which could indicate Bitcoin is overbought.
Experts noted that after the rally in previous weeks growth paused due to a statistically significant wave of profit-taking by short-term investors.
The Mayer Multiple, based on the 200D—MA indicator, reached 1.47, close to 1.5 — the resistance level of previous cycles, including the ATH in November 2021.
On December 11, Bitcoin’s price at one point slipped to the $40,400 mark.
Earlier ForkLog experts shared their views on the reasons for the rally of digital gold and told of prospects for price growth to $52,000.
Earlier, CryptoQuant analysts suggested the possibility of breaking the $50,000 level for the first cryptocurrency in early 2024.