Bitcoin’s $70k Breakout: Will Short-Term Holders’ Buy Price Be the Deciding Factor?
Bitcoin’s $70k Breakout: Will Short-Term Holders’ Buy Price Be the Deciding Factor?
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Recent analysis by CryptoQuant suggests that the average buy price of short-term Bitcoin holders could be a key indicator of the cryptocurrency’s future price movements. This intriguing insight focuses on holders who have acquired Bitcoin within the past few months, with historical data showing that their average buy price often acts as a crucial support or resistance level.
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This phenomenon has been linked to significant shifts in Bitcoin’s market direction. As such, monitoring this average buy price could provide valuable insights into the potential future trends of Bitcoin.
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Short-Term Holders’ Buy Price: A Historical Pattern
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The analysis, conducted by an analyst known as ‘Avocado Onchain,’ highlights historical instances where Bitcoin’s price either broke through or was rejected by the average buy price of these short-term holders. The data reveals that the average buy price of Bitcoin holders who have held their assets for 1-3 months has repeatedly influenced the cryptocurrency’s price direction.
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When Bitcoin successfully breaks through this average buy price, it often signals a notable bullish trend. Conversely, if the average buy price acts as a resistance point, it can indicate the beginning of a bearish phase.
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One example highlighted by Avocado was when Bitcoin reached $73,000 earlier this year, only to experience subsequent declines. According to the analyst, Bitcoin failed to surpass the average buy price of these short-term holders at that time, leading to a bearish trend afterward.
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This pattern suggests that the average buy price of short-term holders can be a reliable on-chain metric for assessing market sentiment. As Bitcoin’s price approaches these levels, it tends to face critical tests of momentum, which can either confirm or redirect the prevailing market trend.
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Bitcoin’s Rally to $70k: A Potential Breakout?
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Bitcoin is currently experiencing a gradual upward push following the recent announcement of a US Fed rate cut. The asset has surged by 5.8% in the past day alone, reaching a trading price of $63,054.
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Avocado noted: \”With the recent announcement of a 50bp rate cut by the U.S. Federal Reserve, Bitcoin is once again attempting to break through the average buy price of 1-3 month holders.\”
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While it remains to be seen whether Bitcoin will ultimately break through the short-term holder buy price level, resulting in further bullish momentum, analysts in the crypto space are expressing optimistic outlooks on the cryptocurrency.
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A Golden Cross and a Bullish Outlook
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According to crypto analyst Moustache, Bitcoin has witnessed a \”golden cross of the SMA100/SMA200 (W)\” for the first time in history. This technical pattern, combined with the recent US interest rate cut, could set the asset up for \”legendary\” price movements in the coming months, according to Moustache.
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As Bitcoin navigates this crucial juncture, the average buy price of short-term holders will be a key factor to watch. If Bitcoin can successfully break through this level, it could signal a significant bullish trend and potentially push the cryptocurrency towards the coveted $70,000 mark.
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Stay tuned for further developments in the Bitcoin market and the potential impact of short-term holder buy prices on the cryptocurrency’s trajectory.