Why Bitcoin Investors Should Consider Increasing Their Holdings [BTC]

Why Bitcoin Investors Should Consider Accumulating More BTC

Bitcoin [BTC] surprised many in Q1 2023 by beating predictions of a further decline and emerged as the best-performing asset class with a 70% price hike. However, as Q2 begins, conversations that preceded Q1’s performance have started to unfold again. Despite this, CryptoQuant author and on-chain analyst Axel Adler Jr. believes that the current BTC state should act as a positive sign for investors.

Fewer Risks, More Rewards

In his analysis published on April 2nd, Adler focused on the impact that the BTC Risk Index has had since November 2022. The Risk Index evaluates the threats that investors might face using delta and market cap. According to the analyst, the metric had decreased to 1.78 at press time, from a maximum value of 3.34 in November, which is a positive sign for investors to accumulate and expand their portfolios. When the index increases, the BTC price decreases, and when the index decreases, the coin’s value increases. Moreover, since it has maintained a downtrend, it means that the opportunity could still be available.

However, Twitter-popular crypto trader StockMoney Lizards believes that Bitcoin’s trajectory may soon end in a bearish divergence. He also admitted that the correction was necessary before the coin appealed to the $30,000 demand.

Cracking the Yoke of Torture

On the other hand, another CryptoQuant analyst who goes by the name “onchained” weighed in on the matter. The analyst dwelled on the Short Term Holder Realized Price (STH RP) and Long Term Holder Realized Price (LTH RP). The LTH RP indicates the buying and selling pattern of long-term investors, while the STH RP tracks the average price moved in the last 1155 days. Furthermore, the analyst pointed out that the realized price, which represents the average cost of all circulating Bitcoin, decreased to $19,722 over the last week.

However, the LTH RP was $21,334 vis-à-vis the STH outpaced it at $21,742. Interestingly, this was one of the talking points of a recent Galaxy Research analysis. Like the full-service market research agency, “onchained” noted that “The fact that the short-term holder’s realized price has exceeded the long-term holder’s realized price is significant because it has only happened three times before, and each time, it signaled the end of a bear market.”

In conclusion, the current BTC state could be the right time for investors to accumulate and expand their portfolios due to the decrease in the BTC Risk Index and the fact that the realized price of long-term investors outpaced the short-term holders’ realized price. However, investors should always remember that investing in cryptocurrencies is highly volatile and carries significant risk.