Grayscale Research Director: If Bitcoin rises over the next few days, it can be seen as a signal that the first phase of a bull market has begun.

BlockBeats News, April 22 — Grayscale Research Director Zach Pandl released a report stating that Bitcoin’s price touched a low of around $63,000 on February 5, and has since rebounded over 20%, currently around $76,000 — slightly above the recent average cost basis for buyers.

Because the Bitcoin blockchain is fully transparent, it is possible to track the cost basis of every transaction. Analysts typically focus on an indicator called “Realized Price,” which is the weighted average price at which all circulating coins last moved on-chain. Bitcoin traded within the last 1 to 3 months has a realized price of about $74,000, meaning recent buyers have already returned to break-even. If Bitcoin’s price continues to rise in the next few days, more recent buyers will turn profitable (PnL positive), which is often seen as one of the signals that the first phase of a bull market has begun.

Core conclusion: Although Bitcoin’s price is still significantly below its October high last year, many recent buyers have already returned to break-even, which may indicate that Bitcoin has formed a relatively stable market bottom in the $65,000 to $70,000 range.