Bitcoin Holders Who Bought In Last 5 Months: Now In Profit On Average

With Bitcoin getting really close to $20,000 those who bought and hedl’d in the last 5 months are looking pretty good. We might see $20,000 again today and maybe, just maybe, this bear market is over.

Bitcoin Holders Who Bought In Last 5 Months Are Now In Profit On Average

As per data from the on-chain analytics firm Glassnode, the BTC price is now above the average cost basis of the short-term holders. The relevant indicator here is the “realized price,” derived from the concept of the “realized cap.”

The realized cap is a capitalization model for Bitcoin that aims to find a sort of “true” value for BTC by putting each coin’s value at not the current BTC price (as is the case in the normal market cap) but instead the price at which the coin was last transferred.

When the usual market cap is divided by the total number of coins in circulation, the BTC price is returned (a fact that’s not surprising in the least, as the market cap is calculated by multiplying the price by the total number of coins, to begin with). If the same idea is applied to the realized cap, a “realized price” can be obtained.

This price is significant because it represents the average cost basis (that is, the price at which the average holder acquired their coins) in the Bitcoin market. This means that if the regular price sinks below the realized price, it is fair to conclude that the average investor is holding at a loss.

The Bitcoin market is divided into mainly two holder groups: the “short-term holders” (STHs) and the “long-term holders” (LTHs). The STHs include any investors who acquired their coins within the last five months (155 days, to be more precise), while anyone holding coins for longer than that falls into the LTH cohort.

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Master Asked on January 13, 2023 in Bitcoin.
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