Bitcoin Enters Optimal DCA Zone, Analysts See Favorable Buying Opportunity

Bitcoin's price metric has entered an "optimal DCA" zone, not seen since the cryptocurrency traded in the $50K to $70K range. This development has led some analysts to suggest that Bitcoin is now in a favorable purchasing zone.

Bitcoin's 60-day RCV (Realized Value to Market Capitalization Variance) has reached its lowest level of -1.9, signaling an 'optimal DCA opportunity' for the first time since July 2024. This metric calculates the 60-day rolling average and standard deviation of BTC price, and when the RCV value is below 0.30, it indicates a low-risk investment in the asset. A value between 0.30-0.50 implies a neutral environment, and above 0.5 means a high sell-off risk.

The analyst pointed out that the metric has been historically accurate in identifying undervaluation and overvaluation trends for BTC, and the current normalized RCV value presents a favorable buying opportunity based on "historical risk-reward dynamics." The BTC proponent added that long-term investors should consider scaling into BTC positions via a DCA strategy as risk-adjusted conditions remain optimal.

In 2024, the RCV value flashed a DCA signal between May and July, where Bitcoin fluctuated between $70,000 and $50,000. Thus, it is essential to note that the RCV does not signal a bottom but highlights the low-risk, high probability of making gains in the long term.

Crypto analyst Yonsei Dent pointed out that Bitcoin's short-term holder SOPR (Spent Output Profit Ratio), which monitors realized profit or losses, had reached a sharp deviation below the lower Bolling Band. Based on such deviations, BTC has registered a short-term rebound between 8%-42%, with recoveries also evident during the 2022 bear market.

Data from Santiment suggests that BTC's price has been correlated with the accumulation and distribution behavior of wallets holding 10+ BTC. Whenever these addresses accumulate, Bitcoin progressively increases in value. Santiment also highlighted that the "key stakeholders" have dumped roughly 6,813 BTC over the past week, its most extensive distribution since July 2024.

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