{"id":624198,"date":"2024-06-12T17:00:58","date_gmt":"2024-06-12T17:00:58","guid":{"rendered":"https:\/\/wncen.com\/?p=624198"},"modified":"2024-06-12T13:38:05","modified_gmt":"2024-06-12T13:38:05","slug":"bitcoin-overheated-right-now-metric-suggests-no","status":"publish","type":"post","link":"https:\/\/wncen.com\/bitcoin-news\/bitcoin-overheated-right-now-metric-suggests-no\/","title":{"rendered":"Is Bitcoin Overheated Right Now? This Metric Suggests No"},"content":{"rendered":"

Data of an on-chain indicator could suggest Bitcoin is currently not at a stage where its price would be at a significant risk of facing correction.<\/p>\n

Bitcoin 365-Day MA Growth Rate Is Sitting Below Historical Overheated Zone<\/h2>\n

In a post<\/a> on X, CryptoQuant author Axel Adler Jr has discussed about the recent trend in the “Growth Rate” metric for Bitcoin. The Growth Rate basically keeps track of the difference between the changes happening in the Bitcoin Market Cap and Realized Cap.<\/p>\n

The Market Cap<\/a> here is naturally just the simple valuation of the cryptocurrency’s total circulating supply at the current spot price. The Realized Cap, on the other hand, is a bit more complex.<\/p>\n

Related Reading: Bitcoin Slips Under $67,000: Can BTC Rely On This Historical Support Again?<\/a><\/div>\n

The Realized Cap<\/a> is an on-chain capitalization model for the asset that takes the “real” value of any coin in circulation to be the same as the price at which it was last transferred on the blockchain.<\/p>\n

As the last transaction of any coin was likely the last instance of it changing hands, the price at its time would act as its current cost basis. Since the Realized Cap sums up this price for all tokens of the asset, it essentially calculates the sum of the cost basis of each coin in the circulating supply.<\/p>\n

In other words, the Realized Cap measures the total amount of capital that the investors have used to buy their Bitcoin. The changes in the Realized Cap would, therefore, represent the capital inflows or outflows happening for the cryptocurrency.<\/p>\n

As the Growth Rate keeps track of how changes in the Realized Cap are reflecting in the Market Cap, it basically tells us about how reactive the market is being to capital flows.<\/p>\n

Now, here is a chart that shows the trend in the 365-day moving average (MA) of the Bitcoin Growth Rate over the last decade or so:<\/p>\n

\"Bitcoin
The value of the metric appears to have been positive in recent months | Source: @AxelAdlerJr on X<\/a><\/figcaption><\/figure>\n

As is visible in the above graph, the 365-day MA Bitcoin Growth Rate has been at positive levels since early 2023. When the indicator has green values, it means that the Market Cap is growing at a rate faster than the Realized Cap.<\/p>\n

At present, the indicator is sitting at the 0.001 mark, which is a relatively high level. Thus, it would appear that capital inflows have been rapidly driving up the price recently.<\/p>\n

Historically, during periods of euphoria in the market, where Market Cap has exploded relative to the Realized Cap, tops have become more probable to take place.<\/p>\n

Related Reading: Litecoin In Uphill Battle: Strong Resistance Might Block Recovery<\/a><\/div>\n

From the chart, it’s apparent, though, that the recent levels of the metric, although high, have still been below the 0.002 mark beyond which corrections have become likely in the past.<\/p>\n

The Bitcoin all-time high (ATH)<\/a> back in March, which has continued to be the top for the rally thus far, had also occurred when the Growth Rate had surged above this level.<\/p>\n

BTC Price<\/h2>\n

Bitcoin had slipped under the $67,000 mark yesterday, but the asset has since seen a recovery push that has now taken its price back above $69,300.<\/p>\n

\"Bitcoin
Looks like the BTC price has almost completely erased its most recent plummet | Source: BTCUSD on TradingView<\/a><\/figcaption><\/figure>\n
Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com<\/div>\n","protected":false},"excerpt":{"rendered":"

Data of an on-chain indicator could suggest Bitcoin is currently not at a stage where its price would be at a significant risk of facing correction. Bitcoin 365-Day MA Growth Rate Is Sitting Below Historical Overheated Zone In a post on X, CryptoQuant author Axel Adler Jr has discussed about the recent trend in the “Growth Rate” metric for Bitcoin. The Growth Rate basically keeps track of the difference between the changes happening in the Bitcoin Market Cap and Realized Cap. The Market Cap here is naturally just the simple valuation of the cryptocurrency’s total circulating supply at the current spot price. The Realized Cap, on the other hand, is a bit more complex. Related Reading: Bitcoin Slips Under $67,000: Can BTC Rely On This Historical Support Again? The Realized Cap is an on-chain capitalization model for the asset that takes the “real” value of any coin in circulation to be the same as the price at which it was last transferred on the blockchain. As the last transaction of any coin was likely the last instance of it changing hands, the price at its time would act as its current cost basis. Since the Realized Cap sums up this price for all tokens of the asset, it essentially calculates the sum of the cost basis of each coin in the circulating supply. In other words, the Realized Cap measures the total amount of capital that the investors have used to buy their Bitcoin. The changes in the Realized Cap would, therefore, represent the capital inflows or outflows happening for the cryptocurrency. As the Growth Rate keeps track of how changes in the Realized Cap are reflecting in the Market Cap, it basically tells us about how reactive the market is being to capital flows. Now, here is a chart that shows the trend in the 365-day moving average (MA) of the Bitcoin Growth Rate over the last decade or so: As is visible in the above graph, the 365-day MA Bitcoin Growth Rate has been at positive levels since early 2023. When the indicator has green values, it means that the Market Cap is growing at a rate faster than the Realized Cap. At present, the indicator is sitting at the 0.001 mark, which is a relatively high level. Thus, it would appear that capital inflows have been rapidly driving up the price recently. Historically, during periods of euphoria in the market, where Market Cap has exploded relative to the Realized Cap, tops have become more probable to take place. Related Reading: Litecoin In Uphill Battle: Strong Resistance Might Block Recovery From the chart, it’s apparent, though, that the recent levels of the metric, although high, have still been below the 0.002 mark beyond which corrections have become likely in the past. The Bitcoin all-time high (ATH) back in March, which has continued to be the top for the rally thus far, had also occurred when the Growth Rate had surged above this level. BTC Price Bitcoin had slipped under the $67,000 mark yesterday, but the asset has since seen a recovery push that has now taken its price back above $69,300. Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com<\/p>\n","protected":false},"author":542,"featured_media":624254,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[88240],"tags":[428,631,92461,88595,86192,1119,1144],"class_list":["post-624198","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bitcoin-news","tag-bitcoin","tag-bitcoin-market-cap","tag-bitcoin-metric","tag-bitcoin-overheated","tag-bitcoin-realized-cap","tag-btc","tag-btcusd"],"acf":[],"yoast_head":"\nIs Bitcoin Overheated Right Now? 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Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to. In terms of official educational qualifications, Keshav holds a bachelor\u2019s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions. Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true. Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn\u2019t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment.. Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form. Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new. As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money. Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn\u2019t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs. Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.","sameAs":["https:\/\/www.linkedin.com\/in\/keshavverma29\/","https:\/\/x.com\/https:\/\/twitter.com\/keshavvarma29"],"url":"https:\/\/wncen.com\/author\/hououinkyouma29\/"}]}},"parsely":{"version":"1.1.0","meta":{"@context":"https:\/\/schema.org","@type":"NewsArticle","headline":"Is Bitcoin Overheated Right Now? 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