- Bitcoin has fallen below the average price at which investors originally bought it, known as the ‘Realized Price’.
- Market participants distribute their assets when BTC is below the realized price level, this causes further downside in some cases.
- If Bitcoin recovers, and surpasses the Realized Price at $19,700 it could be a sign of a resurrection for the leading crypto.
Bitcoin, the largest asset by market capitalization, is currently exchanging hands below the average price investors originally paid for it, a key market watermark known as the ‘Realized Price’ level. The Realized Price (RP) – currently at around $19,700 – in reality provides a dynamic level of support and resistance as bulls will often make a stand at levels where they originally bought, in an effort to push the market back up into ‘profit’. Thus the fact Bitcoin price has slipped below the RP is one sign the market may be nearing a cycle low, however, there may be more blood before the confirmation signal for bulls to go long is given.
Also read: Why Bitcoin could trade sideways for two months before crypto winter ends for BTC
Bitcoin price needs to climb above the realized price to usher in a bull market
Bitcoin, an asset with a market capitalization of $331.27 billion is currently trading at the $17,202.10 level. Experts have noted that BTC price has nosedived below the Realized Price. When the largest crypto asset is above the RP, then on aggregate market participants are in profit and when below, traders are incurring unrealized losses.
Typically, the periods of time where Bitcoin price plummets below the Realized Price occur at major cycle lows. This can be seen in the chart below:
Bitcoin: Realized price on CryptoQuant
Historically, this has occurred at major cycle lows, marked in red in the chart above. When BTC drops below the RP, market participants are not comfortable holding onto losing positions and fear that they could incur further losses. Particularly, in a crypto bear market, where the narrative surrounding the asset is negative, market participants will often wait for the cryptocurrency to climb above the Realized Price level before increasing their exposure.
Typically, when BTC climbs above the RP it is a sign the digital asset is entering a bull market phase. This narrative has been true throughout BTC’s move through the adoption cycle. If BTC fails to surpass RP, it is usually rejected to the downside with substantial bearish momentum. Greatest_Trader, a pseudonymous crypto analyst at CryptoQuant argues that although there is room for the digital asset to bleed, the end of the current bear market could be signaled by the asset’s climb above the RP at $19,700.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC declines as resistance emerges near all-time high
Bitcoin and Ethereum are approaching their key support levels, and a sustained close below these marks could lead to further declines.
TON set to launch synthetic Bitcoin to boost its DeFi solutions
TON revealed its plan on Thursday to launch a synthetic Bitcoin token on its blockchain, allowing users to trade, stake, and earn yield using BTC. Following the announcement, TON is down over 3%.
Maker Price Forecast: MKR could stage 40% rally
MakerDAO is up 2% on Thursday and could be set for a 40% rise in the coming weeks if it successfully maintains an extended move above the descending trendline of a falling wedge. On-chain data also supports the bullish outlook after a four-month-long decline.
USDT market cap crosses $120 billion as stablecoins continue their uptrend
The stablecoin market cap continued its uptrend in October, characterized by USDT reaching a $120 billion market cap, according to a CCData report on Thursday. This indicates that investors are preparing liquidity to fuel more demand.
Bitcoin: New all-time high at $78,900 looks feasible
Bitcoin price declines over 2% this week, but the bounce from a key technical level on the weekly chart signals chances of hitting a new all-time high in the short term. US spot Bitcoin ETFs posted $596 million in inflows until Thursday despite the increased profit-taking activity.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.