Bitcoin Now Trading 24% Below Realized Price, How Deeper Can It Go?

Keshav Verma

Last Updated: June 11, 2024 3:01 pm

3 mins read

Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Created by industry experts and meticulously reviewed

The highest standards in reporting and publishing

How Our News is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Ad discliamer

Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio.

On-chain data shows Bitcoin is now trading 24% below the realized price, here’s how much deeper the crypto went during historical cycles.

Bitcoin Has So Far Declined 24% Under The Realized Price

As pointed out by an analyst in a CryptoQuant post, drawdowns below the realized price have been shrinking with each cycle.

A popular capitalization model for Bitcoin is the “realized cap,” which measures the cap by weighting each coin in the circulating supply against the price at which it was last moved.

This is different from the usual market cap, where every coin in circulation is simply multiplied with the latest BTC price.

Now, from this realized cap, a “realized price” can be derived by dividing the metric with the total number of coins in circulation.

The usefulness of this price is that it signifies the cost basis of the average holder in the Bitcoin market. This means that whenever the normal price dips under this indicator, the average investor enters into a state of loss.

Here is a chart that shows the percentages below the realized price BTC has gone during each cycle:

Looks like the value of the metric has plunged in recent days | Source: CryptoQuant

As you can see in the above graph, the latest crash in the price of Bitcoin has taken the crypto 24% below the realized price, the deepest value observed in the current cycle so far.

It’s apparent from the chart that the previous bear market of 2018/19 saw an even larger drawdown, as the price had declined about 30% below the metric at the bottom.

Comparing the two cycles in isolation would suggest the current bear market still needs to see a notable amount of decline before the same bottom values are hit.

However, things change when the 2015 and 2012 bottoms are also taken into account. In 2012, Bitcoin went as low as 60% below the realized price, while in 2015 the decline was around 41%.

There seems to be a pattern here, and it’s that the percentage of fall below the indicator has been shrinking with each cycle.

If this trend continues to hold this time as well, then Bitcoin may in fact already be near a bottom for this cycle.

BTC Price

At the time of writing, Bitcoin’s price floats around $16.5k, down 1% in the last week. Over the past month, the crypto has lost 14% in value.

The below chart shows the trend in the price of the coin over the last five days.

The crypto continues to show stale price movement | Source: BTCUSD on TradingView

Featured image from Traxer on Unsplash.com, charts from TradingView.com, CryptoQuant.com

Keshav Verma

Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.

Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.

In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.

Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.

Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..

Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.

Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.

As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.

Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.

Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.