Analyzing moving averages such as the 200-day and 200-week moving average can provide insight into Bitcoin’s support and resistance levels. Another important trend to watch is the annualized realized price*, which helps estimate the cost basis across the market by tracking the average price at which funds are withdrawn from exchanges each year, from which it is possible to assess market sentiment and potential price fluctuations.
Theoretically, Bitcoin buyers over the years are now making a profit on their cost basis. However, the 2024 buyer group, many of whom bought the US ETF launched on January 11, is at a critical juncture. These ETF buyers have a cost basis of $57.9k, suggesting they are still profitable but could come under pressure if the price drops below this level.
Jim Bianco, Leader of Bianco Research, emphasize that the buyers of this ETF are primarily retail investors, known as “retail degens,” who may panic and sell if the price of Bitcoin falls below their base price. Therefore, $57.9k becomes an important level to watch as it could affect market stability and investor behavior.
Bitcoin’s actual capitalization reached 600 billion USD
Bitcoin’s realized capitalization has shown a clear increase along with the asset’s price in 2024. As depicted in Glassnode’s chart, the actual capitalization reflects the aggregate value of all BTC at the price at which they were last moved, which differs from traditional market capitalization metrics. This figure reaches about $600 billion by June 2024, coinciding with Bitcoin price stabilizing near $63,000.
Historical data shows a consistent upward trajectory in real capitalization, with notable accelerations as markets recover significantly. The current increase indicates significant market activity, with long-term holders trading and potentially revaluing older UTXOs at higher prices. This trend is consistent with the impact of the post-halving period on market forces, which is typically marked by reduced supply growth and increased demand.
The growth of real capitalization provides insights into market sentiment and investor behavior, highlighting confidence in Bitcoin’s ability to maintain its value over time. The interaction between actual capitalization and price illustrates Bitcoin’s maturity as a digital asset, with increasing amounts of capital locked at higher valuations reflecting a strong market structure.
*Realized price of Bitcoin is a concept that calculates the average value of Bitcoin units that have been converted or moved on the blockchain since its creation. This is an important statistical indicator in cryptocurrency market analysis. Specifically, the realized price is calculated by dividing the total value of Bitcoin units that have been moved during a certain period of time by the total amount of Bitcoin that has been moved during that period. This method helps evaluate the average value at which traders bought or sold Bitcoin during a specific period of time.
Annie
Bitcoin Magazine
