Can This Bitcoin Ratio Have Hints For A Bottom?
July 02 2022 - 3:00PM
NEWSBTC
Past trend of the Bitcoin actual/realized price ratio may be
forming a pattern that could hint at a possible bottom for the
crypto at $17k. Bitcoin Actual/Realized Price Ratio Currently Has A
Value Of 0.8 As pointed out by an analyst in a CryptoQuant post,
historical data of this BTC ratio may have interesting implications
for the current market. The realized cap is a capitalization model
for Bitcoin that multiplies each coin in the circulating supply
with the price at which the coin was last moved and takes the sum
of all the values. This is different from the usual market cap,
where the entire supply is simply multiplied by the current price
of BTC to get the capitalization. Now, from this realized cap, a
“realized price” can also be obtained by dividing the metric with
the total amount of coins in circulation. Related Reading
| New Bitcoin Record Paints Incredibly Bearish Picture As BTC
Struggles At $19,000 The “actual/realized price ratio” is,
therefore, an indicator that measures the ratio between the normal
price of BTC and this new realized price. Here is a chart that
shows the trend in this Bitcoin ratio over the last few years:
Looks like the actual price is lesser than the realized one at the
moment | Source: CryptoQuant In the above graph, the quant has
highlighted the major bottoms during previous Bitcoin cycles and
the value of the actual/realized price ratio at which they
occurred. Looking at the chart, it seems like during the 2015
bottom, the value of the indicator was about 0.6. And in the 2018
bottom, it was about 0.67. Related Reading | Why Bitcoin
Could Collapse Another 50%, Says Michael “Big Short” Burry
Currently, the metric has a value of 0.8, which means the price of
the crypto is around 80% of the realized price right now. If there
is a pattern here with the actual/realized price ratio, then the
bottom this time may also form at a value 0.07 higher than the
previous time. This would put the ratio at about 0.74, which
implies Bitcoin will need to decline further until $17k before this
“bottom” value is reached. Naturally, this would only happen if
there really is such a pattern present here. Another indicator, the
delta capitalization model, suggests that $15k could be a possible
lower bound for a Bitcoin bottom. BTC Price At the time of writing,
Bitcoin’s price floats around $19.2k, down 10% in the last seven
days. Over the past month, the crypto has lost 35% in value. The
below chart shows the trend in the price of the coin over the last
five days. The value of the crypto seems to have been going down
over the last couple of days | Source: BTCUSD on TradingView
Featured image from Michael Förtsch on Unsplash.com, charts from
TradingView.com, CryptoQuant.com
Bitcoin (COIN:BTCUSD)
Historical Stock Chart
From Aug 2024 to Sep 2024
Bitcoin (COIN:BTCUSD)
Historical Stock Chart
From Sep 2023 to Sep 2024