OG Bitcoin On-Chain Models Could Hint At $46,000-$54,000 Floor: Analyst

Analyst Willy Woo has highlighted how some old-school Bitcoin on-chain models could suggest a bottoming zone for the asset in the current cycle.

As shown in the chart shared by Woo, the Bitcoin Realized Price has been sliding down recently, meaning that average investor cost basis has been declining. In other words, the average capital invested per holder is down, so some net capital could be considered to have left the cryptocurrency.

The CDD measures the number of coin days being reset across the network in this manner. The CVDD goes a step further and attaches a USD value to each of these coin days, based on the BTC price at the time, and takes their cumulative sum. Additionally, it applies a normalization factor by taking the sum’s ratio with the total age of the market (in days).

Today, the Bitcoin CVDD is sitting at $45,500. If the pattern from the last few cycles is anything to go by, it’s possible that BTC could find a bottom somewhere between this level and the Realized Price at $54,200. That said, the analyst also added a caution, noting:

Models use past behaviour… there’s only been 4 prior bear markets and they have been inside a secular bull market in risk equities. If that foundation collapses, we will be in uncharted territory (deeper bear).

Bitcoin has again failed to maintain its recovery as its price has slipped to the $67,200 mark.