The price of Bitcoin is always a controversial issue within the crypto community. Especially when it comes to defining whether it is above or below where it should be, in an attempt to predict whether it will increase or decrease in the short term. And in this sense, the latest figures from Glassnode’s „Realized Capitalization“ would bring light to the situation. They indicate a possible drop in the price of BTC.
What is realized capitalization?
But before we talk about this, we must first explain what realized capitalization is, and why it is important that it has reached a new historical record. It stands at $106.7 billion for the entire Bitcoin market.
Now, the realized capitalization is a new statistic designed by the Glassnode team. It calculates the size of the market, according to the price that the Bitcoins had in each unique direction of the Blockchain, the last time they moved.
Thus, if we have 1 BTC in our wallet, bought at $7,000, and 2 BTCs bought at $8,000, Glassnode adds up the $7,000 in the first BTC and the $8,000 in the second, instead of calculating both at the current market price.
„The capitalization made values different parts of the supplies at different prices (instead of using the current daily closing). Specifically, it is calculated by valuing each UTXO at the price of the last time it was moved“. In the words of Glassnode.
Consequently, the fact that Bitcoin’s realized capitalization is increasing indicates that many of the Bitcoin Champion currently on the market have been bought at high prices. That is, they have probably been purchased recently.