Bitcoin’s long-term outlook promising, short-term challenges persist By

Published Sep 15, 2023 07:13AM ET

A recent report by cryptocurrency market data provider CryptoQuant presents a mixed outlook for Bitcoin, indicating promising long-term prospects but acknowledging potential short-term challenges. The report uses key indicators such as the MVRV Ratio and the Holders’ Cost basis to predict the future trajectory of Bitcoin.

According to the analysis, Bitcoin has managed to stay above level 1 of the MVRV Ratio, a key indicator that suggests robust potential for price growth in the long term. Additionally, the Holders’ Cost basis is found to be lower than the Market Cap, which further indicates a positive trend for Bitcoin’s future value.

However, Bitcoin’s short-term outlook is less certain. The report identifies that short-term holders, who play a crucial role in providing liquidity for significant price movements, are currently grappling with price levels between $27.5K and $29K – identified as their break-even point. As Bitcoin’s price continues to hover around these levels, it prompts these short-term holders to reassess their investment positions.

The longer Bitcoin’s price stays below these critical levels, the greater the motivation for these short-term holders to exit the market. Such an exit could result in decreased liquidity and affect overall market dynamics. The CryptoQuant report underscores that Bitcoin’s return to an upward trend depends on its price moving beyond these short-term realized prices.

While the long-term prospects of Bitcoin seem favorable due to factors such as the MVRV Ratio and Holders’ Cost basis indicating growth potential, there are still concerns in the short term. The actions of short-term holders in response to break-even price ranges could significantly sway Bitcoin’s near-term trajectory.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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