Today we’ll be taking a look at the realized cap.

The realized cap values each coin at the price it was last moved at.

It differs to the market cap, which measures the current price multiplied by the circulating supply.

The realized cap is the base layer of so many on-chain indicators. That’s why analysts love this metric.

Lost coins are effectively removed from the calculation, as they have low economic value. Think Satoshi’s coins, which haven’t moved in over 10+ years. (their realized value would be incredibly small as Bitcoin was less than $1)

Uptrends: Coins purchased at cheaper prices are being spent for profits. Bull market signal.

Downtrends: Investors are realizing losses. Bear market signal.

Sideways: Smart money investors accumulating cheap Bitcoins, providing buy support.

The last time I looked at this metric (June 5th) the realized cap was $594 billion. Currently it’s at ~$601.4 billion. An all-time high.

When Bitcoin hovers around it’s all-time high, it’s natural that some investors to take profits.

As these investors take profits, the realized cap increases.

This is because older coins are being revalued from a lower cost basis to a higher one.

That’s why an increasing realized cap can also be considered a bull market signal. (it can only increase during price run-ups)

And as it continues to increase, it signals that there is sufficient demand for these coins at higher and higher prices.

With that in mind, expect to see the realized cap continue rising throughout this cycle.