The below is from a recent edition of the Deep Dive, Bitcoin Magazine‘s premium markets newsletter. To be among the first to receive these insights and other on-chain bitcoin market analysis straight to your inbox, subscribe now.
The realized price of bitcoin has broken its all-time high reached on May 12 earlier this year, with the metric currently at $20,200. Realized price measures the value that every UTXO on the network last moved to calculate the price of bitcoin.
Whereas the market capitalization of bitcoin is calculated by multiplying the circulating supply by the spot price, the realized capitalization takes every “coin” on the market and uses the price at which the coin (or more technically: UTXO) last moved in the calculation. Thus, the realized price is simply taking the realized capitalization and dividing it by the circulating supply.
Realized price can often provide more signal as to investor activity on the network, as it quantifies that bitcoin is actually exchanging hands, and that price is not just being bid up on the margin via the derivative markets, or by whales wash trading.
In the Daily Dive #022, we covered the trends surrounding realized price as bitcoin pulled back 50% from the all-time high, pulling down realized price with it, as class of 2021 investors capitulated in a major way.
When looking at the history of realized price, interesting patterns emerge in different market phases, and sustained drawdowns in realized price are not a positive sign.
“It is very possible that realized price could follow a pattern similar to the 2013 cycle, where realized price briefly started a downward trend before recovering with the start of the second act of the infamous ‘double bubble.’ In our opinion, this is the most probable case, rather than a multi-year bear market followed by re-accumulation.” – The Daily Dive #022 – A Deep Look Into On-Chain Accumulation
With the increase in realized price to all-time high levels, as well as bitcoin still being around 27% below the ATH price set in April, the market value to realized value ratio is at much more attractive levels.
The beneath is from a latest version of the Deep Dive, Bitcoin Journal‘s premium markets e-newsletter. To be among the many first to obtain these insights and different on-chain bitcoin market evaluation straight to your inbox, subscribe now.
The realized worth of bitcoin has damaged its all-time excessive reached on Might 12 earlier this yr, with the metric presently at $20,200. Realized worth measures the worth that each UTXO on the community final moved to calculate the value of bitcoin.
Whereas the market capitalization of bitcoin is calculated by multiplying the circulating provide by the spot worth, the realized capitalization takes each “coin” available on the market and makes use of the value at which the coin (or extra technically: UTXO) final moved within the calculation. Thus, the realized worth is just taking the realized capitalization and dividing it by the circulating provide.
Realized worth can usually present extra sign as to investor exercise on the community, because it quantifies that bitcoin is definitely exchanging arms, and that worth is not only being bid up on the margin by way of the by-product markets, or by whales wash buying and selling.
Within the Day by day Dive #022, we lined the tendencies surrounding realized worth as bitcoin pulled again 50% from the all-time excessive, knocking down realized worth with it, as class of 2021 buyers capitulated in a serious means.
When wanting on the historical past of realized worth, fascinating patterns emerge in several market phases, and sustained drawdowns in realized worth usually are not a constructive signal.
“It is rather attainable that realized worth might comply with a sample just like the 2013 cycle, the place realized worth briefly began a downward pattern earlier than recovering with the beginning of the second act of the notorious ‘double bubble.’ In our opinion, that is essentially the most possible case, moderately than a multi-year bear market adopted by re-accumulation.” – The Day by day Dive #022 – A Deep Look Into On-Chain Accumulation
With the rise in realized worth to all-time excessive ranges, in addition to bitcoin nonetheless being round 27% beneath the ATH worth set in April, the market worth to realized worth ratio is at far more engaging ranges.