Bitcoin realized upper limit (ATH) recently hit a new all-time high due to rapid capital inflows into the market, according to on-chain data.
Bitcoin Realization Upper Limit Sets New Record
According to data from on-chain analytics firm Glassnode, capital inflows into Bitcoin have recently accelerated based on trends in the cryptocurrency's realization cap.
The “realization cap” here refers to BTC’s on-chain capital, which calculates the total value of assets assuming that the “real” value of each coin in circulation is the last traded price on the network. refers to the model. The previous transfer of a coin is likely the last time the coin changed hands, so the price at that time can be considered the current cost basis. Therefore, the realization limit is the sum of the cost bases of all coins in circulation.
Therefore, one way to look at this model is as a measure of the total amount of capital that investors have put into cryptocurrencies. In contrast, the regular market cap, which calculates the total value of the BTC supply at the current spot price, represents the value currently held by holders.
Here, a chart shared by Glassnode shows the trend of Bitcoin realization cap over the past few years and its 30-day change.
The value of the metric appears to have been heading up in recent months | Source: Glassnode on X
From the graph, we can see that Bitcoin Realization Cap has observed almost entirely positive growth since the beginning of 2023, as the 30-day net change in the indicator remains green.
The index's rise was slow for most of last year, but began to rise as 2024 approached. And in the first quarter of this year, the metric set a new record as the 30-day change reached a positive level above the 2021 bull market high.
Since the realized cap represents an investor's overall investment amount, the 30-day change in its value reflects the flow of capital into and out of the asset. From the chart, it is clear that BTC’s ATH earlier this year coincided with the peak of inflows into the coin.
However, during asset consolidation following high prices, demand slowed down and realized cap witnessed deceleration. The trend has only recently changed again, with the 30-day net change in the index spiking again.
Over the past month, this metric has increased by about $21.8 billion to a new record of more than $646 billion. Glassnode noted that this suggests that “liquidity across asset classes is rising, with significant capital inflows supporting price increases.”
BTC price
Despite the rapid capital inflow, Bitcoin's price is still trading around $68,000, marking a lull in Bitcoin's rally.
Looks like the price of the coin has been consolidating recently | Source: BTCUSDT on TradingView
Dall-E, featured image from Glassnode.com, chart from TradingView.com
