Bitcoin Realized Price Flips 200-WMA: What Happens Next?

[Redator]

The Bitcoin Realized Price has surged above the asset’s 200-week moving average (MA). Here’s what could happen next, according to history.

Bitcoin Realized Price Has Overtaken 200-WMA For First Time This Cycle

As pointed out by analyst James Van Straten in a new post on X, the Bitcoin Realized Price and 200-week MA have seen a crossover. The “Realized Price” here refers to an on-chain indicator that, in short, keeps track of the cost basis of the average investor or address on the BTC network.

When the value of this metric is higher than the spot price, it means the holders as a whole are in a state of net unrealized profit. On the other hand, it being under BTC’s value suggests the average investor is underwater.

The 200-week MA, the other metric shared by the analyst, is a technical analysis (TA) pricing model that averages BTC’s closing price over the last 200 weeks. Since 200 weeks roughly equal four years, this indicator is used to gauge BTC’s trend shifts over a classic four-year cycle.

Now, here is the chart shared by Van Straten that shows the trend in the Bitcoin Realized Price and 200-week MA over the past decade:

As is visible in the above graph, the Bitcoin Realized Price has gone up over the past year, a natural result of BTC’s spot price following an uptrend. As investors trade at the higher prices, they reprice the cost basis of their coins higher as well, thus raising the market average.

After the latest increase in the indicator, its value has surged above the 200-week MA. The last time that the former was higher than the latter was in the previous cycle.

Back then, the crossover occurred in 2020, and the orientation was maintained until 2022. Interestingly, the timing of the crossover coincided with the start of that cycle’s bull run. In the 2017 cycle, no crossover preceded the bull run as the Realized Price never dipped under the 200-week MA, but a retest did occur, which sent the metric flying up alongside the spot price.

“When the uptrend begins, so does the bull market,” notes the analyst. It now remains to be seen whether something similar as in the past would occur, with the Bitcoin Realized Price seeing a sustained surge above the 200-week MA.

Speaking of bullish signals, Capriole Investments founder Charles Edwards has revealed that institutional buying represented 75% of Coinbase volume recently.

Edwards has noticed an interesting pattern related to this metric. “All readings above 75% have seen higher prices one week later,” explains the analyst.

BTC Price

Bitcoin set a new all-time high above $124,000 on Wednesday, but the coin has plunged since then as its price is back at $118,300.