On-chain data shows Bitcoin has now been below its realized price for 163 days in this bear market; here’s how this compares with previous cycles.
Bitcoin Realized Price Is Currently Valued At Around $19,900
According to CryptoQuant’s year-end dashboard release, the bear market would be over if BTC reclaims this level. To understand what the “realized price” is, the “realized cap” must be looked at first. The realized cap is a capitalization model for Bitcoin that aims to provide a sort of “real value” for the crypto.
Unlike the usual market cap, which simply values each coin in circulation using the current BTC price, the realized cap prices each token at the same price it was last moved. For example, if 1 BTC was bought at $20,000, but the price has now changed to $16,000, the market cap will consider it valued at $16,000. The realized cap, however, will say its true value is $20,000.
Now, if the total realized cap of Bitcoin is divided by the total number of coins in circulation, a “realized price” is obtained. This price signifies the cost-basis of the average coin in the market (that is, the price at which investors acquired the average coin at). Here is a chart that shows the trend in the BTC realized price over the entire history of the asset:
The BTC price seems to have been below this metric in recent months | Source: CryptoQuant
As the above graph displays, the normal price of Bitcoin has been below the realized price for a while 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.
From the chart, it’s apparent that In the 2011-2012 bear market, BTC spent 158 days under the realized price. Then, in 2014-2015, the coin spent a whopping 276 days in this zone.
The 2018-2019 bear saw the shortest amount of time in the region, as the price took 134 days to pull itself above the level. Finally, Bitcoin has been trapped under the realized price for 163 days in the current cycle.
This means that BTC has spent more time in this region in the current bear market than in any other before, except for 2014-2015. If the current bear is comparable to 2014-2015, then it would mean there is still more than 100 days to go before Bitcoin can exit the zone.
Either way, CryptoQuant expects the crypto to reclaim this level somewhere in 2023, and it will be then that this bear may be considered to be over.
At the time of writing, Bitcoin’s price floats around $16,600, down 1% in the last week.
BTC has declined in the last two days | Source: BTCUSD on TradingView