• According to the latest weekly report from Glassnode, Bitcoin broke through all three realized prices of the market back in April 2019.
• The realized cap is a capitalization model for Bitcoin that values each coin in circulation at the price it was last transacted.
• All investors in the market can be divided into two major cohorts: the „short-term holders“ (STHs) and the „long-term holders“ (LTHs).
As Bitcoin continues its strong rally, $22,400 could be the level to watch next, if this on-chain metric is anything to go by. To understand why, it is important to first understand the concept of „realized price.“ Realized price is derived from the realized cap, which is a capitalization model for Bitcoin that values each coin in circulation at the price it was last transacted. This is different from the usual market cap, which puts the value of all tokens at the same current price of Bitcoin. When the market cap is divided by the total number of coins in circulation, the BTC price is obtained. However, if the same idea is applied to the realized cap, a sort of „realized price“ can be derived. The significance of this price is that it is the cost basis of the average holder in the Bitcoin market.
The implication of this is that if the (normal) price of BTC declines under this realized price, the average investor can be thought to have entered into a state of loss. All investors in the market can be divided into two major cohorts: the „short-term holders“ (STHs) and the „long-term holders“ (LTHs). The former includes investors who acquired their coins less than 155 days ago, while the latter are those who held their coins for longer than 155 days. According to the latest weekly report from Glassnode, the long-term holder realized price of Bitcoin is currently around $22,400, meaning that if Bitcoin’s price drops below this number, the average long-term holder may be in a state of loss.
Therefore, it appears that $22,400 could be the level to watch next for Bitcoin. If the price of Bitcoin falls below this level, then the average long-term holder may be in a state of loss. However, if the price of Bitcoin continues to rise, then it could be a sign of further bullish momentum for the market. Whatever the case may be, it is clear that the realized price of Bitcoin could have a major impact on the future of the market.