The volatility in the aftermath of the announcement of the U.S.-Iran peace talks that never happened saw Bitcoin [BTC] rally 3.85% in five minutes on the 23rd of March. Bitcoin shot higher from $68,574 to $71,216 and reached a local high of $71,817 during Monday’s New York trading session.
The move broke past the “No-trade zone” that crypto analyst Ali Martinez pointed out in a post on X. There were 1.72 million Bitcoin transacted between $65.6k and $70.6k, making it a hotly contested zone.
Bitcoin was once again trading within this area. However, the Bitcoin buying opportunity highlighted last weekend is still viable based on realized price metrics.
Decoding BTC’s defense of the $68k zone
Crypto analyst Axel Adler Jr argued that the defense of the $68k level could see a rally to $80k commence. The reasoning revolved around the realized price.
The ETF realized price was at $79.9k, while the Bitcoin spot price was at $70.7k. This was a discount of around 11.5%. At the same time, the capital flows into the ETFs in the past month only brought the realized price down from $80.5k to $79.9k. In other words, the new capital inflows over the past month were too weak to meaningfully shift the aggregate cost basis lower.
As such, the $79.9k area will be a stern resistance in case of a Bitcoin rally, unless ETF capital inflows increase dramatically.
The cost basis of the cohort of Bitcoin holders with 100-1k BTC was at $67.9k. The trading session on the 23rd of March saw the leading crypto briefly drop to $67.4k before rebounding back above $70k.
The defense of the 100-1k holder cohort’s realized price underlined the resilience of the holders. A move below this price level can lead to more nervousness from the largest holders, which could add to the pressure on Bitcoin.
The Bitcoin bulls’ position seemed tenuous on the 23rd of March, when the Taker Buy-Sell ratio briefly fell below 1. It has climbed to 1.025 at the time of writing, although the 7-day moving average was below 1.
Over the past month, the 7SMA has been greater than 1 to show sustained BTC taker buying, driving prices higher. An increase in the taker ratio could be another favorable sign for the short-term bulls.
Final Summary
- The Bitcoin ETF and large holder cohort realized prices shed light on where the next BTC price trend could be headed.
- The uptick in the taker buy/sell ratio after Monday’s volatility was another point in favor of the short-term bulls.