š What is Cost Basis in crypto?
#Costbasis (cost basis) ā is the average purchase price of an asset at which the investor acquired it.
Example:
⢠Bought 1
#BTC for $40K, then another 1 BTC for $60K.
⢠Average cost basis = ($40K + $60K) / 2 = $50K.
š Why is this important?
ā”ļø Determines support and resistance levels ā if many people bought at the same price, this is a key level.
ā”ļø Locks in profit/loss ā when the price is above the cost basis,
#инвеŃŃŠ¾Ń is in profit, below ā in loss.
ā”ļø Analyzes market behavior ā increasing cost basis = trend continues
#ŠæŠ¾ŠŗŃŠæŠŗŠ° , decreasing =
#ŃŠ°ŃŠæŃŠ¾Š“ажа .
Used to assess where real demand is and where trend reversal points may be.
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