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The Risks of Investing in Bitcoin May Still Be Worth it

03.08.2024 15:00 1 min. read Kosta Gushterov
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The Risks of Investing in Bitcoin May Still Be Worth it

The price of Bitcoin (BTC) has roughly doubled in the past year and continues to offer an attractive risk-return ratio for investors, according to a chain indicator that predicted bullish growth in early 2023.

The “reserve risk” indicator, which measures the confidence of long-term holders based on their willingness to hold rather than sell, remains in the green below 0.002, according to CryptoQuant data.

This suggests that long-term holders are motivated to keep their BTC at current market prices, indicating favorable supply and demand dynamics.

MintingM said that the reserve risk remaining in the green zone means that investing in BTC now offers an extraordinarily high return on risk.

Historically, reserve risk below 0.0027 signals a transition from bear to bull markets, while scores above 0.02 signal bull market tops.

Other indicators, such as the percentage of inactive supply, also point to a return to a hold strategy after profit-taking at record highs earlier this year.

Kosta has been working in the crypto industry for over 4 years. He strives to present different perspectives on a given topic and enjoys the sector for its transparency and dynamism. In his work, he focuses on balanced coverage of events and developments in the crypto space, providing information to his readers from a neutral perspective.

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