Popular crypto analyst InvestAnswers says an on-chain signal suggests Bitcoin (BTC) is well overdue for a rally.
In a new strategy session, the pseudonymous analyst examines Bitcoin’s realized price (RP) metric, which records the value of all BTC at the price at which it was purchased, divided by the number of coins in circulation.
The analyst points out that historically, BTC has not stayed below the RP for long.
“We are counting down to the next halving and here we have been under the realized price… it has now been 170 days and the actual price is below this RP by around $21,000 suggesting an increase in the actual price is on the cards because we won’t stay here that long, at least many believe…
This is a rainbow visual of realized price. And you can see how Bitcoin price is pretty much, most of the time, above the RP… It’s about 97% of the time, 98% of the time it’s above. Now it’s below. Now the question is, how does this form in history? »
According to the analyst, Bitcoin has been below 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, implying that a BTC rebound could approach.
Growing 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 to risky assets like Bitcoin and crypto.
“That’s a pretty cool sign because as we know, as DXY goes up, Bitcoin goes down, and vice versa. time – this graph signals a possible outage. But you could also say that it has already gone from 115 to 109. But here we are again. If that happens, it will also be very good for the risky space.
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