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.
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