Bitcoin $62,039made a significant breakout by passing the $62,000 level for the first time in almost a month after the US Federal Reserve cut interest rates by 50 basis points. The 8% weekly gain created a positive sentiment in the market as CoinMarketCap’s Fear & Greed Index moved back into the “Neutral” range.
Bitcoin Set to Surpass Average Buy Price for Short-Term Investors
CryptoQuant analysts say this short-term rally could be a sign of good things to come. Several key metrics point to Bitcoin approaching the three-month average purchase price of short-term investors. “The average purchase price of investors who have held Bitcoin for 1-3 months has consistently acted as a critical support and resistance level,” CryptoQuant analysts said.
These short-term investors often have a significant impact on the market as they look for arbitrage or profit opportunities based on Bitcoin’s monthly price movements.
When the price of Bitcoin rises above the average purchase price of active traders, it may signal an impending breakout. Otherwise, if Bitcoin fails to break this level, significant losses may be incurred.
Institutions Are Moving Away From Bitcoin Short Positions
Data shows that institutions are moving away from negative Bitcoin derivatives and short order volume has dropped by 75%. The decrease in institutional sell orders is seen as another positive sign of a medium-term rally. “Institutions are no longer shorting Bitcoin aggressively. CME futures net shorts have decreased by 75% in the past 5 months,” Ki Young Ju said.
It may take some time to reach a new Bitcoin all-time high, but after several months of sideways movement, signs are looking more positive.
Bitcoin breaking through critical resistance levels could be an important indicator for investors. A price movement above the average purchase price of short-term investors indicates that the market is gaining upward momentum. The reduction of short positions by institutional investors and the easing of selling pressure support this positive outlook. Considering the fluctuations in the market, it is important for investors to make careful and conscious decisions.
Disclaimer: The information contained in this article does not contain investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
