Bitcoin (BTC) hasn’t participated much in the recent market as it has been an altcoin-driven rally off lately led by Ethereum (ETH) and Dogecoin (DOGE). The BTC price has been consolidating for a long time around $55,000 and holding its market cap just above $1 trillion.
However, if we look at the steep increase in the Bitcoin (BTC) realized cap, the picture is very much clear suggesting that the Bitcoin bull run will continue here onwards. While the market cap considers total BTCs that have been minted, the realized cap takes a more nuanced approach.
The realized cap eliminates the impact of lost or dormant coins that haven’t been moved for long. As opposed to the current Bitcoin value, it measures each unspent transaction output (UTXO) based on the value moved last.
Glassnode CTO and co-founder Rafael Schultze-Kraft show that there has been an unprecedented capital inflow into Bitcoin (BTC) based on its realized cap. Over the last 6 months, the realized cap has jumped a massive 200% by another $250 billion.
1/ Unprecedented capital inflows into #Bitcoin as measured by realized capitalization.
Over the past 6 months, realized cap has surged a whopping $250 billion – an increase of ~200%.
Healthy bull market.
Chart: https://t.co/c7T5zQzmjc pic.twitter.com/zIdUC2w1nK
— Rafael Schultze-Kraft (@n3ocortex) May 6, 2021
Fall In the Bitcoin MVRV (Market Value/Realized Value) Ratio
Over the last month, BTC price has seen solid consolidation and its market cap has remained stable or “flat”. At the same, the BTC realized cap has increased steeper which has led to a fall in Bitcoin’s MVRV value. This is a bullish indicator suggesting strong fundamental build-up for Bitcoin (BTC). Let’s take a look at the chart here.
- BTC’s MVRV-Z score at the same price in Feb 2021 was 7.6.
- The current MVRV-Z score is 4.4.
- Bitcoin’s MVRV during its previous price tops has reached above 10.
Well, it is clear that the BTC realized cap has completely replaced what was Bitcoin’s “market cap” six months back. Although Bitcoin has been consolidating over the last few weeks, GoinGape reported how its on-chain fundamentals continued to improve. Some of the positive pointers:
- Bitcoin (BTC) whale accumulation was strong during this consolidation period.
- Bitcoin’s NVT ratio suggests undervaluation at the current price point.
- Bitcoin’s funding rate at exchanges remains low suggesting a slowdown in profit-booking.