BTC’s On-Chain Metrics Indicate Local Price Bottom Reachedadmin, · Kategorien: Allgemein
• CryptoQuant analyst Joao Wedson suggested that Bitcoin’s [BTC] price may have hit a local bottom at the $24,000 price mark.
• On-chain metrics, like Age Consumed and Network Profit/Loss ratio (NPL) indicate that BTC’s price could be bottoming at the $23,700 price point.
• Taker Buy Sell Ratio indicator can identify BTC’s price trend changes by crossing a value line of one which might signify local tops and bottoms.
CryptoQuant Analyst Suggests Local Bottom
CryptoQuant analyst Joao Wedson has suggested that Bitcoin’s [BTC] price, which saw a 6% decline in the last week, may have hit a local bottom at the $24,000 price mark. Wedson concluded after assessing the 350-day moving average and the 100-day exponential moving average that makes up BTC’s Taker Buy Sell Ratio indicator. According to Wedson, with the Taker Buy Sell Ratio indicator, analysts have found that the 350-day MA and 100-day EMA can identify BTC’s price trend changes. He noted further that the 100-day EMA crossing a value line of one could also signal local tops and bottoms, presenting buying or selling opportunities.
On-Chain Price Bottom Markers Say Otherwise
In terms of identifying local price bottoms for cryptocurrency assets, some on-chain metrics have been effective in that regard. One of the most effective indicators is Age Consumed, which monitors the behavior of previously inactive coins on the blockchain. A surge in Age Consumed indicates a significant number of inactive tokens have been transferred to new addresses, indicating a sudden and pronounced change in the behavior of long-term holders. Since long-term holders and experienced traders seldom make impulsive decisions, a renewed activity of dormant coins often corresponds with significant changes in market conditions.
A look at BTC’s age consumed revealed a spike in its Age Consumed metric on 22 February when BTC traded at $23700 USDT,. BTC’s price then spent three days rallying to trade at 24100 USDT ,at press time .The growth in BTC’s Price which followed this surge could be taken as an indication for Local bottoming near 23700 USDT .
Network Profit/Loss Metrics
Another indicator useful to note is Network Profit/Loss ratio (NPL). This metric calculates mean profit or loss of all coins transferred to new addresses on daily basis .This approach is used to identify instances of profit taking or holder accumulation when prices are low relative to their intrinsic value .
In conclusion , it appears from both analyses ,that bitcoin has indeed reached its local bottom near 24000USD ,however if one wishes to follow On chain metrics they should expect further rise above current levels if age consumed continues its recent trend .
Importance Of Metrics In Crypto Trading
Metrics like age consumed & NPL are important indicators for crypto trading as they provide insight into how long term holders view current market situation & their response towards it .Therefore any trader should consider these additional sources before making any investment decision regarding cryptos .