On-chain data analysis reveals that the cost basis of Bitcoin investors who have held their coins for 1-3 months continues to provide strong support to the cryptocurrency's price. This support line has played a vital role in sustaining Bitcoin's recent bullish momentum, according to observations made by a CryptoQuant analyst. The key metric used in this analysis is the "realized price," derived from a Bitcoin capitalization model known as the realized cap. The steady rise in the realized price for the 1-3 months investor cohort suggests their continued confidence and belief in the upward trajectory of Bitcoin.

Understanding the Realized Price:

The realized cap model calculates the total value of Bitcoin based on the assumption that each coin in circulation is worth the price at which it was last moved, in contrast to the market cap, which uses the current spot price. By dividing the realized cap by the total number of coins in circulation, the "realized price" emerges. This indicator reflects the average price at which investors entered the market and acquired their coins.

Analysis of the 1-3 Months Investor Cohort:

Within the Bitcoin market, there are two main divisions: long-term holders (LTHs) and short-term holders (STHs). The 1-3 months cohort falls under the STH group, comprising investors who have held their coins for less than 155 days. Analyzing the realized price trend specifically for this group provides valuable insights into their buying behavior.

Continuously Rising Realized Price:

A chart displaying the trend of the 1-3 months cohort's realized price reveals a consistent upward trajectory in recent times. This aligns with the overall price increase of Bitcoin during the same period. Since these investors acquired their coins within the past three months, their cost basis naturally follows the asset's price trend, albeit with some lag.

Interacting with the Support Line:

Noteworthy is the interaction between the realized price line and the cryptocurrency's price. During the bear market, the price encountered resistance at this line. The likely reason behind this pattern is that investors, facing losses throughout the bear market, would take the opportunity to sell their coins when the price approached their average cost basis (realized price). This allowed them to minimize losses during a challenging period.

Support Provided in the Bull Market:

However, with the beginning of the bull market this year, the pattern appears to have reversed. The realized price of the 1-3 months cohort has now become a support level for the asset's price. It seems these investors now view their cost basis as a profitable buying opportunity, anticipating further price appreciation in the near future.

Current Status and Outlook:

At present, the realized price for this investor group stands around $26,600, the level at which Bitcoin recently bounced off. As the support line continues to hold, it indicates that this segment of STHs remains optimistic and has not lost their bullish conviction. Their continued belief in the potential growth of Bitcoin suggests that they see the current market conditions as favorable for further investment.

Conclusion:

The cost basis of Bitcoin investors who have held their coins for 1-3 months has been providing consistent support to the cryptocurrency's price. This support line has played a crucial role in maintaining Bitcoin's bullish momentum. The steady rise in the realized price for this investor cohort indicates their confidence in the future price appreciation of Bitcoin. As long as this support line holds, it suggests that these investors remain optimistic and committed to their bullish stance on Bitcoin.