Two Things to Watch in Bitcoin’s Price Following the Recent Pump
As Bitcoin’s price pumped toward $21K in the past 48 hours, here are two important things to watch going forward.
After a period of prolonged consolidation within a particularly tight range, Bitcoin’s price finally made a move to the upside. Up 8.3% in the past seven days, most of which came over the last 48 hours, BTC is now sitting right below $21K.
The entire cryptocurrency market followed, and its total capitalization recovered over $1 trillion. Regardless, here are two things to watch in the days to come.
Bitcoin’s Realized Price
On October 6th, CryptoPotato reported that Bitcoin whales have been buying BTC at an average price of $15,800 since January 2017.
Now, an analyst from CryptoQuant brings up another very important metric – BTC’s realized price (RP). This is the average buying price of all bitcoins.
The cryptocurrency has traded below its RP throughout all bear markets. When it manages to break above it, the price action below that point can be treated as a deviation, meaning that there’s some further room for growth.
As seen in the chart above, Bitcoin’s realized price currently sits at slightly above $21K and is very close to the current price. It’s important to monitor how the cryptocurrency will perform once it reaches this level.
Short-Term Holders SOPR
The Short-Term Holder Output Profit Ratio (STH-SOPR) is a ratio of spent outputs which have been alive for more than one hour and less than 155 days in profit at the time of the window.
The basic rule of thumb is as it follows:
If the STH-SOPR has a value greater than 1, this means coins moved are selling at a profit, on average.
If the STH-SOPR is exactly 1, this means coins moved are selling at break even.
If the STH-SOPR has a value below 1, this means coins moved are selling at a loss.
At the time of this writing, the value is slightly below 1, which also means that this level will likely act as a resistance to the price moving above it.
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