a new sign of the price reaching the floor; The historic fall of one of the important indicators of Bitcoin in 2022
The Bitcoin realized market value index, which is a suitable tool for identifying different phases in the market, has experienced the second biggest drop in its history during 2022.
To Report CryptoSlate, a review of historical market data shows that the 2022 fall in the price of Bitcoin was the fourth major decline in the value of this digital currency from its historical peak. In this downward cycle, Bitcoin fell from its peak of $69,000 to nearly $15,500, which represents a 77% price drop.
As can be seen from the chart below, the biggest drop in the price of Bitcoin from a historical peak occurred in 2011 and was equal to 91.78%. During the down markets of 2015 and 2018 to 2019, Bitcoin has seen drops of 82.75% and 82.63%, respectively.
The subject of this report is “the realized value of the Bitcoin market”. An index in which instead of multiplying the current market price by the total number of circulating units in the network, the current price of their last transfer is considered. In this way, the total value paid for the purchase of units in the network is measured.
This indicator actually reduces the influence of units that have remained untouched for a long time in estimating the market value of Bitcoin. Since these particular units have not been moved for years, they will not affect the realized market value of Bitcoin; Unless they are transferred to another address after several years, in which case they can affect this index depending on the volume of transfer (number of transferred units).
The chart below shows that Bitcoin’s 2022 realized market cap fall is the second largest drop in history. In November 2022 (November of this year), the amount of fall in the realized market value of Bitcoin reached 18.99%.
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The realized market value of Bitcoin is currently estimated at 383 billion dollars, which is 56 billion dollars less than the market value of 439 billion dollars of this digital currency. Comparing normal market value and realized market value can be a good tool to identify different phases in the market. In other words, when the normal market value is greater than the realized market value, it can be said that Bitcoin holders are in total profit.
On the other hand, if the realized market value is higher than the normal market value of Bitcoin, it means that the holders of this digital currency are in total loss and the price at which they bought Bitcoin is higher than the price at which they can instantly sell it. do
According to available data, the Bitcoin market is currently in overall profit. Although the amount of this gain is not as much as the market is used to, it is a sign of a slow and continued price recovery from the second biggest drop in the market capitalization index.