Why Is the $33,700 Level Critical for Bitcoin Price?

• On-chain data suggests that if historical patterns mean anything, $33,700 could be a crucial level for Bitcoin.
• In the current context of the debate, it’s not the cost of the entire market that matters; it’s only the cost of a specific segment: those who bought their coins less than six months and up to three years ago.
• If this historical pattern holds any significance, then Bitcoin rising above $33,700 in the near future could become the starting point for the next major bull run.

The $33,700 price level could play a critical role for Bitcoin to get off to a solid start in its next bull run.

The $33,700 Level and Bitcoin

On-chain data suggests that if historical patterns mean anything, $33,700 could be a crucial level for Bitcoin. In a recent article, analyst Ali shared a chart that could shed light on the likely path BTC might follow.

The relevant indicator here is the “realized price,” which tells us at what price the average investor in the Bitcoin market acquired their coins. When the asset’s spot price surpasses this line, it means that holders are generally in a net profit position with their coins. On the other hand, BTC being below this level indicates that the average investor is currently in a loss.

In the current context of the debate, it’s not the cost of the entire market that matters; it’s only the cost of a specific segment: those who bought their coins less than six months and up to three years ago. Here’s a chart showing how the cost of Bitcoin investors has changed over the years:

Investors who bought coins between six months and three years ago are actually part of a larger “long-term holder” (LTH) group. LTHs are investors who have held their coins for at least six months.

In the chart, the analyst has added data for the cost of the entire LTH group, and this measurement currently sits at approximately $20,300, significantly above the spot price.

However, since the realized price of those who bought between six months and three years ago is currently above the spot price, at around $33,755, it means that this segment of LTHs is currently definitively in a loss.

Bitcoin’s Fate Could Be Determined

It’s evident that Bitcoin’s price didn’t touch this level when the bear market first started in 2022. If the cryptocurrency can rise towards this level and eventually retest it, its fate could improve.

As Ali points out, BTC has consistently seen significant upward movements each time it broke the cost of LTHs when these HODLers returned to profit.

This pattern is clearly visible in three instances on the chart: the 2017 bull run, the April 2019 rally, and the 2021 bull run, all occurred when the cost of LTHs from six months to three years ago was successfully broken.

If this historical pattern holds any meaning, then Bitcoin rising above $33,700 in the near future could become the starting point for the next major bull run.