On-chain data shows that Bitcoin is now 163 days below its realized price in this bear market; here’s how this compares to past cycles.
The price realized by Bitcoin is currently estimated at around $19,900
According to CryptoQuant’s year-end dashboard release, the bear market would be over if BTC regains this level. To understand what the “realized price” is, it is first necessary to look at the “realized limit”. The realized cap is a capitalization model for Bitcoin that aims to provide some kind of “real value” for the crypto.
Unlike the usual market cap, which simply values every coin in circulation using the current BTC price, realized cap prices each token at the same price it last moved. For example, if 1 BTC was purchased for $20,000, but the price has now changed to $16,000, the market cap will consider it to be worth $16,000. However, the realized limit will say that the actual value is $20,000.
Now, if Bitcoin’s total realized limit is divided by the total number of coins in circulation, a “realized pricewas obtained. This price indicates the cost basis of the average coin in the market (that is, the price at which investors bought the average coin). Here is a chart that shows the trend in the realized BTC price over the entire history of the asset shows:
The BTC price seems to have been below this metric in recent months | Source: CryptoQuant
As the chart above shows, Bitcoin’s normal price has been below its realized price for some time now. Historically, BTC has spent very little time in this region as only the worst phases of a bear market usually pull the coin below the level.
The chart shows that in the 2011-2012 bear market, BTC was 158 days below its realized price. Subsequently, in 2014-2015, the coin spent a whopping 276 days in this zone.
The 2018-2019 bear saw the shortest time in the region as the price took 134 days to pull itself above the level. Finally, in the current cycle, Bitcoin is stuck below its realized price for 163 days.
This means that in the current bear market, BTC has spent more time in this region than any other region except 2014-2015. If the current bear is similar to 2014-2015, then that would mean there are over 100 days left before Bitcoin can leave the zone.
Anyway, CryptoQuant expects the crypto to regain this level sometime in 2023, and it will be then that this bear can be considered over.
BTC price
At the time of writing, Bitcoin’s price is hovering around $16,600, down 1% over the past week.
BTC has declined in the last two days | Source: BTCUSD on TradingView
Featured image of Kanchanara on Unsplash.com, charts from TradingView.com, CryptoQuant.com