• The article explains the concept of “realized price”, derived from a Bitcoin capitalization model called the “realized cap”.
• It discusses how this model helps mitigate the problem of coins that have become permanently inaccessible due to lost wallet seed phrases.
• The article also provides a chart that shows the trend in the Bitcoin realized price over the last few months.
What is Realized Price?
The “realized price” here refers to a price derived from a Bitcoin capitalization model called the “realized cap”. Unlike the normal market cap, which puts the value of all the coins in the circulating supply as the same latest BTC price, this model says each coin’s “true” value is its price at which it was last moved. The main advantage of this cap model is that it puts less weight on coins that have been dormant for a long time (as their prices would have been much lower back then).
Why Does Realized Price Matter?
If the realized cap is divided by total number of coins in circulation, we obtain what is known as “realized price”. This realized price doesn’t apply to each coin but rather signifies cost basis of average holders in Bitcoin market – i.e., at which they acquired/bought their coins. If the current asset’s value goes below realized price, then average investors are currently in state of loss – which has historically been seen during bear markets.
Realized Price Trend Over Last Few Months
Below is a chart showing trend in Bitcoin realized price over last few months: Looks like recent days had seen asset’s value approaching this metric | Source: CryptoQuant
How Can Retesting Realised Price Help Push Asset Value?
Retesting realised prices can help push asset values back up and restart rally if BTC manages to maintain this level – according to an analyst in CryptoQuant post. By putting less weight on coins that have been dormant for long time, meaning they can no longer influence prices in any meaningful way, realised cap helps mitigate such problems and thus increase chances of successful retest and renewed rally.
Conclusion
In conclusion, understanding and tracking trends related to ‘realised’ prices can give us insight into possible future movements for Bitcoin prices along with providing valuable data about investor sentiments across different stages within market cycle.