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Bitcoin price enters ‘transitional phase’ according to BTC on-chain analysis

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The hopeful optimism of Bitcoin (BTC) traders seemed to dissipate in the first week of March as key on-chain metrics provided resistance.Now Bitcoin is threatening a retest of the $22,000 level, and a wave of short sellers would stand to profit if that occurred.

If the short sellers’ strike price hits, some analysts believe Bitcoin could drop as low as $19,000. A handful of analysts still project BTC to hit $25,000 in the short-term, on-chain data highlighting a few reasons for price resistance at higher levels.Market participants’ concern over the Federal Reserve’s interest rate hikes and high inflation are heavy macro headwinds facing Bitcoin and this has investors weighing the time value of money (TVM) of BTC investments.

To measure TVM on-chain, Bitcoin holders can be put into groups based on the amount of time they held BTC and average the acquisition cost.

Investors that purchased BTC within the last six months benefited from the early bear market conditions and have an average realized price of $21,000, which places them in profit.

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