This Highly Profitable Bitcoin Cross Has Just Formed Again

Keshav Verma

2 years ago

3 mins read

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On-chain data shows that a Bitcoin cross that has proved quite profitable has once again formed for the cryptocurrency.

Bitcoin Realized Price Of Short-Term Holders Overtakes Long-Term Holders

As an analyst in a CryptoQuant post explained, the realized price of the 1 to 3 months holders has just exceeded that of the 6 to 12 months investors.

The “realized price” here refers to a metric derived from the “realized cap,” which is a capitalization model for Bitcoin that assumes a coin’s true value is the price at which it was last transacted on the blockchain rather than the current BTC price as the usual market cap says.

The realized price is obtained when the realized cap is divided by the total number of coins in circulation. Since the realized cap accounted for the prices at which the investors acquired their coins (their “cost basis”), the realized price represents the average acquisition price in the market.

This means that whenever the Bitcoin price dips below this metric, the average cryptocurrency investor holds assets at a loss. Similarly, a break above implies a transition towards profits for the average investor.

In the context of the current discussion, the realized price of three specific segments of the market is relevant; the holders who bought between 1 month and 3 months ago, 3 months and 6 months ago, and 6 months and 12 months ago.

The first two of these are parts of the “short-term holder” (STH) cohort, while the third one is part of the “long-term holder” (LTH) group. Here is a chart that shows the trend in the Bitcoin realized price specifically for these segments of the market:

Looks like two of these metrics have come together in recent days | Source: CryptoQuant

As shown in the above graph, an interesting pattern formed during the leadup to the 2021 bull run. First, the realized price of the 1-month to 3 months cohort exceeded that of the 6- 12 months group. Following this crossover, BTC saw some sharp uptrend, but it didn’t last long.

Then, as this price increase winded down, the 3- 6 months segment also crossed above this LTH cohort. These crossovers implied that fresh purchases were happening in the market as the rally built up. Since the prices were rising during this leadup, the STHs had to buy at higher and higher prices, which is why their realized price went up and eventually became higher than the LTHs’.

After these crossovers were completed, the BTC bull run ramped up. Recently, the first of these crossovers seem to be forming again, as the realized price of the 1-month 3 months group is now equal to that of the 6 months to 12 months band.

While it’s uncertain if the second crossover will also go and take shape now, Bitcoin could observe at least some bullish momentum from this initial cross alone (assuming that it’s not just a fake-out), just like it did back in 2020.

BTC Price

At the time of writing, Bitcoin is trading around $29,800, up 1% in the last week.

BTC has seen rapid increase in the past day | Source: BTCUSD on TradingView

Featured image from Dylan Leagh on Unsplash.com, charts from TradingView.com, CryptoQuant.com

Keshav Verma

Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.

Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.

In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.

Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.

Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..

Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.

Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.

As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.

Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.

Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.

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