Volatility in the wake of the announcement of US-Iran peace talks, which never happened, has made Bitcoin visible [BTC] rally 3.85% in five minutes on March 23. Bitcoin shot higher from $68,574 to $71,216 and hit a local high of $71,817 during Monday’s trading session in New York.
The move broke past the “No-trade zone” that crypto analyst Ali Martinez pointed out in a post on
Bitcoin once again traded within this area. However, the Bitcoin buying opportunity highlighted last weekend is still feasible based on the realized price metrics.
Decoding BTC’s defense of the $68k zone
Crypto analyst Axel Adler Jr. argued that defending the $68k level could trigger a rally to $80k. The reasoning revolved around the realized price.
The ETF’s realized price was $79.9k, while Bitcoin’s spot price was $70.7k. This was a discount of approximately 11.5%. At the same time, capital flows into the ETFs over the past month have only reduced the realized price from $80.5k to $79.9k. In other words, last month’s new capital inflows were too weak to meaningfully shift the overall cost base downward.
As such, the $79.9k area will provide stiff resistance in the event of a Bitcoin rally unless ETF capital inflows increase dramatically.
The cost basis of the cohort of Bitcoin holders with 100-1k BTC was $67.9k. During the March 23 trading session, the leading crypto briefly fell to $67.4k before recovering above $70k.
The defense of the realized price of the 100-1k holder cohort underlined the resilience of the holders. A move below this price level could lead to more nervousness among the largest holders, which could increase pressure on Bitcoin.
The Bitcoin bulls’ position looked weak on March 23, when the Taker Buy-Sell ratio briefly fell below 1. At the time of writing it has risen to 1.025, although the seven-day moving average was below 1.
Over the past month, the 7SMA has been greater than 1, which shows that BTC buyers are persistently buying, causing prices to rise. A rise in the taker ratio could be another favorable sign for the short-term bulls.
Final summary
- The realized prices of the Bitcoin ETF and its large cohort of holders shed light on where the next BTC price trend could be heading.
- The rise in the taker buy/sell ratio after Monday’s volatility was another point in favor of the short-term bulls.