Bitcoin Is Due for a Rally as On-Chain Metrics Reach New Heights

An on-chain indication from popular crypto analyst InvestAnswers suggests that Bitcoin (BTC) is ripe for a rise.

In a new strategy session, the pseudonymous analyst examines Bitcoin’s realized price (RP), which is the worth of all BTC at their purchase price divided by the number of coins in circulation.

BTC has seldom lasted below the RP, the expert notes.

“We’re counting down to the next halving and here we’ve been under the realized price… it’s now 170 days and the actual price is under that RP of about $21,000, suggesting an upswing in the actual price is on the cards because we don’t stay down here that long, at least many believe…

This is a rainbow visual of the realized price. And you can see how the Bitcoin price is pretty much, most of the time, above the RP… It’s to the tune of like 97% of the time, 98% of the time it’s above that. Now it’s below. Now the question is, how does that shape up in history?”

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The expert noted that Bitcoin lasted below the RP for 110 days in 2011, 240 days in 2015, 115 days in 2018, 8 days in 2020, and 170 days in 2022, suggesting a BTC rebound.

The expert argues the weakening US dollar index (DXY) suggests Bitcoin is primed for a surge. DXY—the USD against a basket of major fiat currencies—is generally adversely associated to risk-on assets like Bitcoin and crypto.

“This is a pretty cool sign because as we know, as DXY goes up, Bitcoin goes down, and vice-versa. They are inversely correlated. If history repeats – and we’ve said that a lot lately – this chart signals a possible breakdown. But you could also argue it already has broken down from 115 down below 109. But here we are again. If this does happen, this will be very good for the risk-on space as well.”