The price of Bitcoin and the cryptocurrency market in general saw major gains last week as geopolitical tensions in the Middle East appear to have come to a temporary halt. The top cryptocurrency has maintained relatively strong momentum since breaking the psychological resistance of $70,000 on Tuesday, April 7.
Now, this sudden resurgence has sparked a conversation in the cryptocurrency industry about whether the Bitcoin price has yet formed a structural bottom. The world’s largest cryptocurrency could still experience a “final dump” before this bearish phase ends, according to a prominent cryptocurrency founder.
On-chain signals indicate BTC decline once more.
In an April 10 post on the This prediction is based on on-chain insights that suggest that the BTC price tends to move toward the bottom of the cycle when investor prices fall below the long-term holder (LTH) realized price.
Wedson explained the relevance of these on-chain insights and why they appear before major prices and subsequent coin accumulation. According to on-chain data experts, investor price is a measure of the average cost of an economically active coin, and a drop below the LTH realized price means more new capital has flowed in at a price lower than what long-term investors paid.
Wedson wrote to X:
This usually occurs after the distribution phase, when demand weakens and marginal buyers withdraw. Long-term holders have historically sold less when prices are close to or falling from cost.
Source: @joao_wedson on X
As can be seen in the chart above, the LTH realized price appears to be exceeding the investor price, indicating a transition phase where weak hands liquidate and strong hands gradually absorb supply. However, it is worth noting that this absorption has been slower than expected, which explains why the Bitcoin price often falls into a mid-accumulation range.
Moreover, if investor prices are below the LTH realized price, market surges tend to taper off quickly as they meet the supply (selling pressure) of investors looking to exit at the breakeven price. This phenomenon limits the current upside potential of top cryptocurrencies, strengthening the possibility of price declines until a new demand impulse emerges.
Finally, Wedson pointed out that the current Bitcoin price structure is historically geared toward mid-cycle resets rather than final bottoms, reflecting the market “digesting” previous excesses, rebalancing its cost base and moving the coin to more patient investors. “The environment favors time-based accumulation over momentum-driven expansion,” the Alphractal founder wrote.
Bitcoin price at a glance
As of this writing, the BTC price is just above $73,100, reflecting a nearly 2% rise over the past day.
The price of BTC on the daily timeframe | Source: BTCUSDT chart on TradingView
Featured image from iStock, chart from TradingView
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