The data shows that Bitcoin is now above its realized value once more as it surges to $22k. Is this the end of the cryptocurrency recovery?
Bitcoin’s Second Attempt to Break the Realized Price in Ten Days
An analyst pointed out that BTC could be moving above its realized price after having spent 33 days at the lowest level.
To understand what the “realized price” is, it’s best to first take a look at a quick explanation of the two main capitalization methods for Bitcoin.
The “market cap” is calculated by multiplying each coin in circulation right now with the current BTC price, and taking the total sum (or more simply, it’s just the total number of coins multiplied by the price).
Where the “realized cap” differs is that, instead of taking the same one price for all, it rather weighs each coin against the value of BTC at which the particular coin was last moved/sold.
Similar Reading: Bitcoin Bearish Sign: Exchange Netflows Jump Up| Bitcoin Bearish Signal: Exchange Netflows Spike Up
Consider, for example, that Bitcoin’s current price is $22k. There are currently two Bitcoins in circulation. If the price of one coin moves at $22k and the other is at $15k then there will be a market capitalization of $44k. But the actual cap will not exceed $37k.
Simply divide the realized cap and the total coins in circulation to calculate the realized price. Below is a chart that shows how this indicator has changed over the last month.
Source: CryptoQuant| Source: CryptoQuant
The graph above shows that Bitcoin’s value briefly jumped above its realized price approximately ten days prior to falling again.
Historically, late stage bear markets have lasted while the price of the crypto has remained below the metric’s line, with it acting as resistance.
Similar Reading: Bitcoin Funding Rate Changes Highly Positive. Long Squeeze in The Making| Bitcoin Funding Rate Turns Highly Positive, Long Squeeze In The Making?
Today, BTC has once again shot up above the realized price curve, but it’s yet to be seen whether this time the recovery will last. This could signal that the bear market for the current cycle has reached its bottom.
Bitcoin is now 33 days below the actual price, ignoring the short spikes that occurred above it. In 2015, Bitcoin was nine months below this level. It was only for quarter of an year in 2018.
BTC Prices
At the time of writing, Bitcoin’s price floats around $22k, up 8% in the last seven days. In the past month, crypto’s value has risen by 8%.
Price of coin appears to have risen over the past 24 hours | Source: BTCUSD on TradingView
Featured Image from Maxim Hopman at Unsplash.com. Charts from TradingView.com and CryptoQuant.com.
