Bitcoin Realized Price

The Bitcoin Realized Price represents the value of all bitcoins based on their last on-chain transaction, divided by the total number of bitcoins in circulation. This metric essentially gives us the average cost basis of Bitcoin, or the price at which all bitcoins in the network were acquired.

In contrast to the Market Price, which reflects the current price of Bitcoin ($BTC), the Realized Price shows the average purchase price of bitcoins over time.

It’s important to note that the Realized Price is based on the value of each UTXO when it was last transferred between wallets, with the assumption being that when bitcoins move from one wallet to another, they are being "bought."

Why Is Bitcoin’s Realized Price Key for Investors?

The Realized Price of Bitcoin helps to gauge the overall health of the market. It essentially reflects whether the average Bitcoin investor is in profit or suffering a paper loss.

• When the $BTC Market Price is above Realized Price, it suggests that most participants are profitable.

• When the $BTC Market Price is below Realized Price, it signals that many are incurring losses.

How Can This Help Investors?

Periods when the Market Price is below Realized Price often coincide with times of market distress. These moments historically signal cycle lows, where Bitcoin holders are fearful and may sell their assets, fearing deeper losses. But for value investors, these periods present opportunities, as the $BTC Market Price eventually recovers and rises above Realized Price, entering a bull market.