Of the many different metrics to explore for Bitcoin, the realized price is often overlooked. It depicts the current value of Bitcoin by dividing its realized cap by the current supply. As this value has now reached another all-time high, Bitcoin’s bullish momentum is likely to continue.
Bitcoin’s Realized Price is Crucial
Most people look at Bitcoin and see its price depicted in fiat currency. Based on the value they see, they determine if Bitcoin is either bullish or bearish. It is a viable approach, but there is a lot more to this story than meets the eye at first. Comparing the different metrics is crucial before drawing any conclusions.
One of the metrics to keep an eye on is the realized price. Many people may overlook this metric because they aren’t even aware of the metric in question. With the help of platforms such as Glassnode, it becomes a lot easier to explore the different segments that make up Bitcoin as a whole.
Looking at the chart above, it is clear that Bitcoin’s realized price has hit an all-time high. In fact, it has hit two all-time highs in less than 24 hours. A very interesting development, albeit one that was to be expected. Bitcoin’s price has been bullish
for some time now, but that is not the only contributing factor to the realized price.
To calculate the realized price for Bitcoin, we need to look at the realized cap, divided by the current supply. Bitcoin’s realized cap values every Bitcoin UTXO by the price when it was last moved. This is very different compared to using the market price, as the realized cap is a completely different matter.
What Comes Next?
In theory, it is not surprising to see the realized price for Bitcoin go up over time. As it takes the UTXOs into account based on the last time they moved, a rising Bitcoin price will automatically do the trick. However, if too many people move their BTC between higher values, the realized cap will go down, and affect the realized price in the process.
This current all-time high seems to confirm a lot of people are firmly holding Bitcoin. It is often the best approach when it comes to the world’s leading cryptocurrency. Its value tends to appreciate over time, primarily because people don’t day trade. As such, one can – theoretically – expect the value to increase by simply holding.
One thing to keep in mind is how the realized price is very different from the market value of Bitcoin. In fact, it has always been lower, which is a good thing. That said, the RP may reach the market price of Bitcoin at some point. It is not impossible to see this metric’s value hit $16,000, but that will probably mean Bitcoin’s market value is much higher.