Could this Bitcoin relationship have hints for a bottom?
The previous trend for Bitcoin actual / realized price ratios may form a pattern that may indicate a possible bottom for the crypto of $ 17k.
Bitcoin actual / realized price ratio currently has a value of 0.8
As pointed out by an analyst in a CryptoQuant post, historical data on this BTC ratio could have interesting implications for the current market.
The realized cap is a capitalization model for Bitcoin that multiplies each coin in the circulating offer by the price at which the coin was last moved and takes the sum of all the values. This is different from the normal market value, where the entire offer is simply multiplied by the current price of BTC to get the capitalization.
Now, from this realized peak, a “realized price” can also be obtained by dividing the metric by the total amount of coins in circulation.
Related reading | New Bitcoin record paints an incredibly bearish picture while BTC is struggling with $ 19,000
“Actual / realized price ratio” is therefore an indicator that measures the relationship between the normal price of BTC and this new realized price.
Here is a chart showing the trend in this Bitcoin relationship in recent years:
Looks like the actual price is lesser than the realized one at the moment | Source: CryptoQuant
In the graph above, the quantum has highlighted the most important bottoms during previous Bitcoin cycles and the value of the actual / realized price ratio where they occurred.
If we look at the chart, it seems that the value of the indicator below the 2015 bottom was about 0.6. And in the 2018 bottom, it was about 0.67.
Related reading | Why Bitcoin could collapse another 50%, says Michael “Big Short” Burry
At the moment, the metric has a value of 0.8, which means that the price of the crypto is around 80% of the realized price right now.
If there is a pattern here with actual / realized price conditions, then this time the bottom may also form a value of 0.07 higher than the previous time.
This will set the ratio at about 0.74, which means that Bitcoin must decline further to $ 17k before this “bottom value” is reached.
Of course, this would only happen if there really is such a pattern present here. Another indicator, the delta capitalization model, suggests that $ 15k may be a possible lower limit for a Bitcoin bottom.
BTC price
At the time of writing, Bitcoin’s price is floating around $ 19.2k, down 10% over the last seven days. Over the past month, the crypto has lost 35% in value.
The chart below shows the trend in the price of the coin over the last five days.
The value of the crypto seems to have been going down over the last couple of days | Source: BTCUSD on TradingView
Featured image from Michael Förtsch on Unsplash.com, charts from TradingView.com, CryptoQuant.com
