CryptoQuant, a firm specializing in cryptocurrency data analysis, has highlighted that Bitcoin is nearing a pivotal point concerning investor sentiment.
The company reports that Bitcoin’s price is hovering close to $81,500, which corresponds to the average acquisition cost for many investors. They caution that if the price dips below this threshold, it could trigger increased selling activity and potentially cause a more significant market decline.
In their detailed review, CryptoQuant explains that this price level serves not only as a psychological barrier but also represents what they call the True Market Average Price (TMMP). This metric calculates the average purchase price on the blockchain excluding miners’ holdings. Historically, TMMP has functioned as an equilibrium zone: when Bitcoin trades above it, investors tend to feel secure and view minor downturns as buying chances; however, falling beneath TMMP often turns this level into resistance where holders who bought at average prices might seize rallies to exit positions.
Another key measure discussed is the AVIV Ratio. This indicator evaluates investor profitability by comparing active market capitalization against realized market capitalization. CryptoQuant characterizes AVIV as an on-chain sentiment gauge reflecting investor positioning rather than mere price movements. Presently, AVIV readings resemble “mid-term transition” phases from previous cycles—periods marked by neither sharp crashes nor strong upward trends but characterized instead by sideways movement with reduced volatility and gradual portfolio adjustments among investors.
The analysis suggests we are entering a crucial stage where overall confidence appears fragile. Should Bitcoin maintain levels above TMMP near $81,500 while AVIV stabilizes between 0.8 and 0.9, it would imply investors are absorbing supply effectively and defending their cost basis—a bullish sign for sustaining current momentum. Conversely, if prices fall below TMMP accompanied by persistent tightness in AVIV values, this may indicate declining profitability along with waning investor confidence, potentially prompting buyers to seek opportunities at lower valuations.
This content does not constitute financial advice.