Bitcoin Realized Price: Onchain Data

Source: lookintobitcoin

Bitcoin has maintained its leadership position among cryptocurrencies since its inception in 2009. However, this leadership is also marked by price movements that sometimes exhibit significant volatility. In this chart, we can see how Bitcoin's realized price movements have evolved over the years in detail.

BTC Price vs. Realized Price

BTC Price: This represents the current market price of Bitcoin, indicating the last value agreed upon by buyers and sellers.

Realized Price: This is the average price at which long-term investors have purchased Bitcoin. In other words, it represents the cost of Bitcoin to long-term investors.

What Can We Learn from the Chart?

In the chart, we observe the changes in Bitcoin's realized price compared to its current price over the years. The black line represents Bitcoin's price at those times, while the orange line represents the realized price.

The first notable point in the chart is that both lines generally move together. However, there are occasional divergences between these lines.

In summary, this data provides critical information about when an upward cycle may begin. When the market price falls below the realized price, we typically see a bullish reaction. Looking at past periods, we can easily confirm this.

On the other hand, if the market price rises significantly above the realized price, warning signs of a decline start to appear. However, determining when a decline will occur is nearly impossible by looking at a single indicator.

What Do Current Data Tell Us?

Following the collapse of FTX and the subsequent drop of Bitcoin below $16,000, the realized price was at around $20,000. According to this indicator, an uptrend was expected. Months later, the BTC price managed to rise above $31,000.

In fact, when we look at the chart, we see that we are currently in an accumulation phase. A drop in the market price below the realized price again would trigger a bull market. Otherwise, if this scenario does not materialize, we are still far from a bull market.