Bitcoin Realized Market Cap Breaks Record $ 400 Billion

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The following is taken from a recent edition of Deep Dive, Bitcoin Magazine’s high-end market newsletter. To be among the first to receive this and other on-chain bitcoin market analysis straight to your inbox, subscribe now.

Bitcoin’s realized market capitalization has just broken a new all-time high and surpassed $ 400 billion. Realized Price and Market Cap is a chain trend that we follow very closely in The Deep Dive, as Realized Price is essentially the average cost base of all bitcoin in the network.

With an realized market cap exceeding $ 400 billion, the realized price of bitcoin is $ 21,250.

Source: Glassnode

Source: Glassnode

When analyzing the history of the realized price of bitcoin, we can identify clear trends that identify underlying trends in the market. First covered by The Deep Dive in July in The Daily Dive # 022, the realized price gives a very transparent view of the state of the bitcoin market cycle. When the realized price appreciates quickly, it means that bitcoin is in a bullish (green) market. This happens when a new wave of entrants enter the market and attempt to secure their end of the network, which places a large supply in the market.

At the same time, with prices becoming parabolic (due to the fundamental imbalance between supply and demand), the old holders are pulling a few chips off the table and the dynamics of changing hands lead to a rapid appreciation of the price / cap achieved. .

Conversely, during bear markets (red), the realized price tends to fall as coins are spent at a loss (compared to their initial acquisition). It is important to note, however, that the realized price drops much less proportionally to the market price / market cap, which was subject to the reflexive phase of the bull market.

Finally, during the accumulation (yellow) phase of the market cycle, you will see the realized price stagnate or increase slightly as coins move from weak hands to strong hands, from speculators to doomed HODLers.

While some might argue that we have been in a steady bull market since the halving in May 2020, when we look at the realized price trends we see a bull market from October 2020 to May 2021, a brief bear market of two. months and now a re-accumulating phase before the next parabolic uptrend.

Source: Glassnode

Some may argue that the recent uptrend reflects that bitcoin is structurally in a bull market, however, it is important to note that the steepness of the uptrend on the logarithmic scale is a true reflection of a bull run in the market. bitcoin. Seen in a linear scale (the chart above) for perspective, it may look like a bull market, but in logarithmic terms with a multi-cycle view, it is clear that we are in the accumulation phase, in the process of wind up for the next bull market parabolic move. The arrows below display the slope of the realized price during each market phase.

Source: Glassnode

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