An analyst has recently shed light on the potential crossover between two key Bitcoin metrics that could signal the beginning of a bullish trend for the cryptocurrency. The metrics in question are the Bitcoin Realized Price and the 200-week moving average (MA).
The Realized Price, as explained by analyst James Van Straten in a post on X, tracks the cost basis or acquisition price of the average investor on the Bitcoin network. When the spot price of Bitcoin surpasses this metric, it indicates that holders are in a state of net unrealized profit. Conversely, when the spot price falls below the Realized Price, it suggests that the overall market is holding loss.
On the other hand, the 200-week MA is a technical analysis indicator that calculates the average value of Bitcoin over a specified time period. This moving average is particularly significant as it smoothens out short-term fluctuations in the asset’s price chart, making it useful for studying long-term trends.
A chart shared by the analyst shows the trend in the Bitcoin Realized Price and the 200-week MA over the past few years. The Realized Price fell below the 200-week MA during the 2022 bear market and has since been approaching a retest of the line. Previous crosses of the Realized Price above the 200-week MA have historically heralded full-blown bull runs for Bitcoin.
Van Straten notes that “when the realized price flips the 200WMA, the fun begins,” implying that a bullish trend may be on the horizon if such a crossover occurs in the current cycle. However, it remains to be seen whether the Realized Price will indeed surpass the 200-week MA or face a rejection.
Interestingly, the Realized Price has also acted as a boundary line for bear market lows in Bitcoin’s price history. When Bitcoin falls below this metric, the majority of the market enters a state of loss, leading to a lack of sellers looking to take profits and potentially signaling a market bottom.
In terms of recent price action, Bitcoin has experienced a sharp jump, with its price recovering to $96,600 after dropping below $90,000. This upward movement comes amidst anticipation surrounding the potential crossover between the Realized Price and the 200-week MA, hinting at the possibility of a bullish trend for the cryptocurrency.
Overall, the convergence of these two key metrics could hold significant implications for Bitcoin’s price trajectory in the near future, potentially signaling the start of an exciting period for the asset.