Bitcoin price rebounds, but recent buyers are likely underwater- until crypto tops $47,000
Bitcoin price's drop since its November high has been so steep that the average buyer over the last couple of months is likely underwater until it once again tops $47,000. That’s according to Blockforce Capital, which found that the average price investors paid for the coin over the last five months is $47,000, meaning that, on average, anyone who bought during that period has probably lost money and might not be inclined to buy more until they break even.
This indicator, known as short-term cost basis, is an “impediment to creating some consistent momentum,” wrote Blockforce Capital’s Brett Munster, who analyzed Glassnode data.
Bitcoin price is down about 35% since it peaked at almost $69,000 as risk aversion grows with the Federal Reserve and other global central banks starting to tighten financial conditions and remove pandemic-era liquidity from the system. Riskier assets, including cryptocurrencies, tend to suffer in such an environment as traders pull back from high-flying investments. The coin, trading at roughly $44,750 on Thursday, would need to rise another 5% or so to reach the break-even level for recent buyers.
Coincidentally, Munster points out, $47,000 is also right around Bitcoin’s 200-day moving average, which currently stands at roughly $49,000. That’s “a widely recognized indicator for determining which direction markets are trending in,” he wrote, adding that “this threshold could provide resistance as those recent buyers may look to recoup their investment and sell off.”
Though January was rough, the last few days have been better for Bitcoin. Thursday marks its eighth positive day, a feat not seen since July. It’s added more than $100 billion to its market value since February started, according to
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