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Author: Admin | 2025-04-28
The article below is an excerpt from a recent edition of Bitcoin Magazine PRO, Bitcoin Magazine’s premium markets newsletter. To be among the first to receive these insights and other on-chain bitcoin market analysis straight to your inbox, subscribe now.Bitcoin Market DynamicsThe goal of this article is to zoom out and highlight some of the latest bitcoin market moves through the lens of on-chain data: realized price, profit-taking behavior and bitcoin supply levels.Currently, bitcoin is trading at approximately 1.5x its realized price, which recently resurged past the $20,000 mark. This milestone provides an interesting perspective and other on-chain data helps us paint a more comprehensive picture. Following typical bitcoin capitulation events, the supply often gets constrained by the participants with the most conviction. We now find ourselves precisely in such a phase: A mere 13% of circulating supply is held on exchanges and in the hands of short-term holders.However, it’s important to note that while current price action and realized profits do not necessarily support the notion of a full-fledged bull market, we thus far have witnessed previous realized losses/on-chain capitulation turning into a small yet steady stream of profits (old coins moving at a higher price level than they were acquired for). As shown below, the market-value-to-realized-value metric paints a picture of the birth of a nascent new bull market, with valuations no longer at bottom-barrel levels but still far from relatively overpriced, currently ranking in the 39% of historical readings. Looking at the rate of change of the realized price, the historical analog of the current market look to be the early months of 2016 and the summer of 2019, where price had sufficiently rebounded off the lows, with most of the bleeding finally over, as the market consolidated amid constrained supply conditions and a growing network effect of real world adoption.Realized Cap, Not Market CapThe logarithmic chart of bitcoin’s realized market capitalization, reflecting the aggregate value of all bitcoin at their last traded price, demonstrates the asset’s resilience. Unlike market cap, which is the product of circulating supply and current price, the realized cap shows the precise value of each bitcoin UTXO, courtesy of its transparent ledger.Realized cap paints a far different picture regarding bitcoin’s monetization compared to what one may be led to believe when viewing bitcoin’s hyper-volatile mark-to-market exchange rate.A mere 15% below the realized market cap all-time high, capital inflows have returned, resembling previous bear market recoveries. During recovery periods following bitcoin bear markets, we have seen a reclaim of the previous all-time high in realized market cap while bitcoin was still 40%-60% below its all-time high exchange rate. This historical dynamic demonstrates a couple things:First, it suggests that capital inflows can continue to
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