After crossing this threshold, Bitcoin will most likely enter bull market, but it is not clear when it is going to happen
There are tons of tools and indicators that can help you determine if an asset is moving in a bearish or bullish trend, including moving averages, indices, and other technical instruments. But investors mainly use market data such as the average cost base, which reflects the average cost of an asset tenuous.
The short-term holder cost basis used by lead blockware analyst Will Clemente is an “excellent” bearish sign of the current downtrend, according to the analyst. Clemente believes that the indicator can help us to determine the current momentum on the market.
Whenever an asset crosses the SHCB line from above, the market momentum shifts to the downside, and when an asset rallies and crosses the SHCB line from below, the market enters a bullish phase.
The indicator reflects the average cost of Bitcoin held on addresses of short-term investors and traders that entered the asset a relatively short time ago. Whenever an asset moves below it, short-term holders hold funds at a loss.
If the price crosses the SHCB line after falling below, we should note that the market has enough power to push the price of the asset above the “equilibrium selling pressure” at which the market is faced whenever short and medium term holders see the possibility of breaking out even on a previously unprofitable position.
As of now, Bitcoin is struggling to show almost any kind of upward volatility and has been struggling in the $20,000-$21,000 range for the last 10 days because of the lack of inflows to the market.
At press time, Bitcoin is changing hands at $20,000 and has lost 1.1% of its value in the past 24 hours.
