In the world of cryptocurrency, Bitcoin has once again become the focus of attention as the price of the digital currency experienced a recent decrease in realized price. According to data by CryptoQuant, a popular cryptocurrency analytics platform, the realized price of Bitcoin has decreased from $20,000 to $19,725, which is attributed to the behavior of long-term holders.
Realized Price is a metric that represents the average cost basis of all bitcoins in circulation, and it is calculated by dividing the value of all bitcoins at the price they were bought by the number of bitcoins in circulation. It is a valuable metric for understanding market sentiment and identifying trends.
The Short Term Holder Realized Price (STH RP) and Long Term Holder Realized Price (LTH RP) are two important sub-metrics of Realized Price that help to distinguish the average cost basis of investors who have held Bitcoin for different time periods. STH RP refers to the average price at which Bitcoin was acquired by investors who have held their Bitcoin for less than 155 days, while LTH RP refers to the average price at which Bitcoin was acquired by investors who have held their Bitcoin for more than 155 days.
The recent decrease in realized price can be attributed to the behavior of long-term holders who tend to accumulate Bitcoin only during price corrections, which in turn lowers their cost basis. This accumulation behavior of long-term holders can help to explain the decline in realized capitalization.
One interesting development is that the short-term holder’s realized price of Bitcoin has exceeded the long-term holder’s realized price. This means that on average, those who have held Bitcoin for a shorter period of time have acquired their Bitcoin at a higher price compared to those who have held Bitcoin for a longer period of time. Specifically, the short-term holder’s realized price is currently at $21,742, while the long-term holder’s realized price is at $21,334.
This situation is significant because it has only happened three times before, and each time, it signaled the end of a bear market. This suggests that the current market sentiment may be turning bullish, and that a new uptrend may be emerging.
In conclusion, the recent decrease in realized price of Bitcoin is an important metric for understanding market sentiment and identifying trends in the cryptocurrency world. The behavior of long-term holders and the relationship between short-term holder’s realized price and long-term holder’s realized price are important factors that contribute to the overall market sentiment. As the cryptocurrency market continues to evolve, it will be interesting to see how these metrics continue to develop and influence the market.
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