Next cycle's hypothetical $36k Bitcoin floor, exploring historical data to project future benchmarks – CryptoSlate

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The global crypto market cap is $1.05 trillion with a 24-hour volume of $14.11 billion. The price of Bitcoin is $26,884.73 and BTC market dominance is 49.8%. The price of Ethereum is $1,555.54 and ETH market dominance is 17.8%. The best performing cryptoasset sector is eCommerce, which gained 31%.
Though volatility persists, the ‘realized price’ metric shows Bitcoin’s repeated rebound post-bottoms
Bitcoin’s valuation, often viewed as speculative, can be dissected more accurately through the lens of the ‘realized price‘ metric.
This measure, reflecting the average cost at which all current Bitcoin holders purchased their coins, negates the impacts of volatility, thus offering a more realistic view of Bitcoin’s value over time.
Historical data reveals distinct cycles wherein Bitcoin’s market price traded beneath its realized price, as shown by the blue boxes in the chart below.
Specifically, it saw significant drops in value during the following periods:
Following these periods, Bitcoin has consistently traded above the realized price, illustrating a robust rebound pattern.
As of 2023, Bitcoin’s price at $26,800 is considered fair against the realized price of $20,300. This continual pattern of ‘higher highs’ demonstrates the inherent resilience of this digital asset.
Projecting the next bottom cycle based on Bitcoin’s realized price presents an intriguing thought experiment. While historical performance cannot conclusively predict future price action, understanding cycle patterns allows for a more holistic view of the Bitcoin market.
Historical data shows that in 2011, the bottom realized price was $4.50, which surged 55x to $250 in the 2015 bottom cycle.
Subsequently, the bottom in 2019 saw a 22x increase to $5,500.
The 2022 cycle bottomed at $20,000, marking a 3.6x increase.
If we follow this pattern of halving the multiplier with each cycle, the next bottom, hypothetically, could be around $36,000, reflecting a 1.8x increase compared to the 2022 bottom.
Ultimately, this exercise allows us to envision what Bitcoin’s valuation could look like should it follow similar patterns as previous cycles after the upcoming 2024 halving. While the future remains uncertain, contextualizing Bitcoin’s current position relative to past realized price data provides a more explicit framework to anticipate possibilities.
James fervently appreciates data, technology, and trend-spotting. As a tech and liberty maximalist, he hails Bitcoin as the 21st century’s paramount invention.
Disclaimer: Our writers’ opinions are solely their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own due diligence before taking any action related to content within this article. Finally, CryptoSlate takes no responsibility should you lose money trading cryptocurrencies.
Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
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