According to CryptoQuant, reserve risk indicators are essential tools that assist investors in gauging the confidence of long-term holders of Bitcoin. These indicators provide insights into the confidence levels in relation to the current price of the cryptocurrency. Key metrics such as VOCD, MVOCD, and Signal are included in these indicators, which collectively help in making well-informed investment decisions.
Reserve Risk Indicators: A Guide for Bitcoin Investors
Research indicates that periods of low Reserve Risk have historically resulted in significant returns, highlighting its importance in analyzing market sentiment and investor behavior. This analysis was conducted by @joao_wedson. For more information, visit the link below:
VOCD and MVOCD Metrics: Essential Components of Bitcoin Investment Strategy
When evaluating Reserve Risk, factors like BDDs and ABDDs are taken into account to adjust for Bitcoin’s circulating supply. VOCD (Value of Coin Days Destroyed) is calculated by multiplying the daily BTC price by Adjusted BDD, while MVOCD represents the median of VOCD, helping to mitigate fluctuations in the specified parameters. These metrics reflect the growing confidence of holders and are instrumental in assessing the risk-reward prospects.
A retrospective analysis of market data reveals that periods of low Reserve Risk have typically yielded higher returns, making it a crucial aspect of market sentiment evaluation.
MVOCD Indicates Bitcoin Resistance at $73,800
When the MVOCD price surpasses that of Bitcoin, it signals resistance and the formation of local tops. The most recent bearish signal was identified from late March to early April 2024, yet Bitcoin has not managed to reclaim its previous all-time highs.
Two bearish signals were observed from 2017 to early 2018, with another in 2021 preceding the record high. While these metrics are valuable, achieving new all-time highs depends on the actions of long-term investors. Currently, the latest peak stands at $73,800 for the year 2024.
Tags: BTC
