Could this Bitcoin ratio hint at a bottom?

A past trend in Bitcoin’s actual/realized price ratio may be forming a pattern that could suggest the cryptocurrency could bottom at $17,000.

The Bitcoin Real/Realized Price Ratio is currently at 0.8

As one analyst in CryptoQuant pointed out postalhistorical data on this BTC ratio could have interesting implications for the current market.

This Realize the upper limit is a capitalization model of Bitcoin that multiplies each coin in the circulating supply by the price at which that coin was last moved, and takes the sum of all values. This is different from the usual market cap, where the full supply is simply multiplied by the current price of BTC to be capitalized.

Now, from this realized cap, the “realized price” can also be obtained by dividing this metric by the total amount of coins in circulation.

Related reading | New Bitcoin record paints incredibly bearish picture as BTC struggles at $19,000

Therefore, the “actual/realized price ratio” is a measure of the ratio between the normal price of BTC and the newly realized price.

Here is a chart showing the trend of Bitcoin ratios over the past few years:

Looks like the actual price is lesser than the realized one at the moment | Source: CryptoQuant

In the chart above, the quantitative analyst highlights the major bottoms in previous Bitcoin cycles and the value of the actual/realized price ratio when they occurred.

From the chart, it seems that during the 2015 bottom, the value of this indicator was around 0.6. And at the bottom of 2018, it was about 0.67.

Related reading | Michael ‘Big Short’ Bury Says Why Bitcoin Could Crash Another 50%

Currently, the metric has a value of 0.8, which means that the cryptocurrency is trading at about 80% of its current realized price.

If there is a pattern of the actual/realized price ratio here, then this time a bottom could also be formed at a value 0.07 higher than the previous one.

This would put the ratio at around 0.74, meaning Bitcoin needs to fall further until $17,000 to reach this “bottom” value.

Of course, this only happens if such a pattern really exists here. Another metric, the delta capitalization model, Suggest $15,000 could be a possible lower limit for Bitcoin’s bottom.

BTC price

As of this writing, price of bitcoin Floating around $19.2k, down 10% over the past 7 days. The cryptocurrency has lost 35% in value over the past month.

The chart below shows the trend of the coin’s price over the past five days.

Bitcoin Price Chart

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

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