As a researcher with experience in on-chain analysis, I find Glassnode’s latest report on the Bitcoin Realized Cap intriguing. The metric’s recent slowdown in growth suggests that the rate of new capital flowing into Bitcoin has significantly decreased. This trend is evident from the chart showing the change in the Bitcoin Realized Cap over the past few years.
In its most recent weekly analysis, Glassnode, a well-known on-chain Bitcoin analytics company, reported a decrease in the current appetite for Bitcoin purchases.
Bitcoin Realized Cap Has Slowed Down Its Uptrend Recently
In their latest report, Glassnode explores the recent advances of Bitcoin’s Realized Capitalization. The term “Realized Cap” signifies an on-chain valuation approach for BTC that estimates its worth by assigning every coin in circulation the current market price at which it last transacted on the blockchain.
From a crypto investor’s perspective, since the latest transaction on the blockchain likely represents the last point of sale for any given coin, the price at that moment can be considered its current cost basis. Consequently, the Realized Capitalization refers to the aggregate cost basis for the entire circulating supply.
As a crypto investor, I can explain that this model signifies the overall funds we’ve deployed to acquire Bitcoin. Consequently, it serves as an essential indicator for monitoring if our investments are pouring into or withdrawing from Bitcoin.
As a data analyst, I’d like to highlight the intriguing trend depicted in the chart provided by Glassnode regarding Bitcoin’s Realized Cap. Over the past few years, we can observe an upward trajectory in this metric, indicating that the collective value of Bitcoin held by investors has been increasing steadily.
The Bitcoin Realized Cap, as shown on the graph above, had been surging dramatically prior to the recent record-breaking price peak. This robust increase signified a substantial influx of investment capital into the cryptocurrency.
More recently, the rate of growth for this metric has slowed down. While its value continues to rise and new all-time highs are being reached, the increases are significantly less dramatic compared to before.
As an analyst, I’ve observed a noticeable decrease in the inflow of fresh capital into the Bitcoin network compared to its peak. The market seems to be in the process of absorbing the recently distributed supply.
The graph illustrates more clearly the recent fluctuations in the inflow of capital into this sector.
When investors realize a profit by selling cryptocurrencies at a higher price than their initial purchase price, the Realized Capitalization (Realized Cap) grows as there is a market willing to buy those coins. Conversely, when investors sell at a loss, the Realized Capitalization decreases since they have sold coins for less than their original investment cost, which reduces their overall investment in the cryptocurrency.
The Bitcoins market took in a substantial amount of gains as depicted by the Realized Profit/Loss graph at the time of the All-Time High (ATH). However, since then, this indicator has noticeably decreased, suggesting a significant reduction in the demand for Bitcoin.
BTC Price
Yesterday, Bitcoin reached a new milestone by breaking the $71,000 barrier. However, it seems that the asset has experienced a decline today and is currently hovering around $70,200.
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2024-05-23 04:11