A “favorite” price signal for Bitcoin (BTC) could be on the verge of becoming bullish – and an upward trend has always emerged, as data shows.
As podcast host Preston Pysh noted on Oct. 18, the Realized Price Ratio for Long-Term and Short-Term Owners (LTHSTH-RPR) looks ready to print a bull flag.
Chart hints on the bulls’ return
It may sound wordy, but LTHSTH-RPR is one of the most accurate Bitcoin price indicators. Its creator, Dylan LeClair, the organizer of the Bitcoin 2021 conference, confirmed his own bullish stance based on his values in late September.
“TLDR: The lower the short-term: long-term realized price ratio, the more bullish I become,” he wrote in an explanatory Twitter thread.
“In the end, all bears will die.”
Now that the indicator has been trending down for several months, it is high time for a rebirth – and BTC / USD has always benefited from it.
Under the hood, LTHSTH-RPR shows the cost base of long-term and short-term holders. A long-term holder is defined by on-chain analytics firm Glassnode as an address that holds coins that have not moved in at least 155 days.
“If the realized STH: LTH price ratio increases, it means that the STH cost base increases relative to the LTH cost base and vice versa,” added LeClair.
“BTC rises when the marginal seller is exhausted. Because of this, the cost base of LTHs remains stagnant during explosive bull runs, while the cost base of STHs (many of which are new entrants) explodes – there just aren’t enough coins to get around. “
So far, the LTH cost base has not been eclipsed by the STH cost base – if this happens the current downward trend should end.
The story remains “up only”
As Cointelegraph reported, LTHSTH-RPR is just one of several BTC price metrics that have given bulls a boost in recent weeks.
Similar: All-time high at the end of the week – 5 things to watch for Bitcoin this week
Everything from on-chain metrics to network fundamentals to pure math suggests that Bitcoin is imminent – widely expected from the fourth quarter of the year after halving.
Nevertheless, analysts are already watching the market for an exit. The impact of the exchange-traded funds launched this week is unlikely to be a market mover in the short term either.