Bitcoin (BTC) is trading below its realized price indicator, which currently stands at $21,400. A decisive recapture of this level would likely mark the market bottom.
Realized Price is an on-chain indicator that measures the price of BTC at the time of the last movement instead of the current price. In turn, it cancels lost coins and coins that haven’t moved for a long period of time.
Noted analyst and trader @DylanLeClair_ tweeted a chart of the price and the realized price, showing that the former has fallen below the latter. This means a significant number of buyers are at a loss and is a sign associated with bear markets.
prehistory
The actual BTC price has fallen below the realized price five times since 2011. This happened in August 2011, January 2015, July 2018, March 2020 and July 2022 (black circles).
These moves have been linked to Bitcoin market bottoms. However, the periods in which this reverse decline took place varied.
- 2011 – 110 days
- 2015 – 240 days
- 2018 – 115 days
- 2020 – 8 days
- 2022 – 100 days so far
While there was no consensus on how many days BTC price will stay below its realized price, it appears that Bitcoin’s recapture of the realized price is a sign that the bottom is in.
Furthermore, with the exception of 2011, it always took less than 100 days after the initial drop to bottom, although this was not confirmed until BTC reclaimed the price it had achieved.
Current reading
The BTC price has now been below the realized price for 100 days. All this time it made an attempt to reclaim the price it had achieved and even traded slightly above it, but has since fallen back below it.
So if previous readings can be relied on, the bottom has not been confirmed, but it may have been hit.
BTC movement
As for price action, on Sept. 21, BTC created a bearish candlestick with a long upper wick (red icon). The candlestick caused a breakdown below the $19,000 support area, negating all gains that came from the September 19 bullish hammer (green symbol).
So, while the daily RSI is still bullish, there is no horizontal support below the current price as its bullish divergence trendline is still intact. On the contrary, the $19,000 area is now likely to offer resistance.
As for the short-term move, it is possible for BTC to trade inside a descending wedge, completing an end diagonal in the process. This is supported by the bullish divergence on the RSI and the extremely choppy move.
If true, Bitcoin would jump towards $20,000 ahead of another drop, which would hardly result in a new yearly low.
This move would fit the long-term count and complete the correction that has been ongoing since the all-time high (white).
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