Take a look at the on-chain indicators, more specifically the ratio between market capitalization (MC) and realized ceiling (RC), to find similarities between the current cycle and the bull cycles before.

The correlation between MC and RC has marked history with lows.

BTC realized upper limit

BTC market capitalization (MC) is calculated by multiplying the market price of BTC by the total number of coins mined. Realized Cap (RC) also uses a similar multiplication. Instead of the market price, however, the most recent price for “Unspent Transaction Output” (UTXO) is used.

This is done to decrease the value of coins that have been lost or have not moved in a very long time.

The realized upper limit has been rising rapidly since April 2019.

It hit an all-time high of $ 377.795 billion on May 15. It did so about a month after market capitalization hit an all-time high.

RC has steadily declined since then and is now $ 362 billion. This means that the participants sell their lost coins. This causes the RC to drop. There have been around $ 15 billion in losses in the market since the all-time high.

Source: Glass knot

MC approaches RC

A closer look at the historical movement of this on-chain indicator shows that the MC fell below the RC in December 2018 and March 2020. These two periods also mark cycle lows.

In December 2018, MC was below RC for five months, while MC did so in less than a month in March 2020.

As for the ratio, the RC is now 64% of the MC. This is a relatively high value as the value of RC is typically less than 50% of the MC value.

When market capitalization hit an all-time high in April 2021, RC was just 25% of MC.

Source: Glass knot

During the 2017 bull cycle, similarly high rates were achieved on January 17 (78%) and August 21, 2016 (66%). In addition, rates over 50% were achieved on January 13 (55%) and March 25 (52%) 2017. These four periods are indicated by the black arrows in the graphic below. They all mark a local low for Bitcoin.

For the remainder of 2015-2018, all RCs by market capitalization (MC) were below 50.

Source: Glass knot

Bull market 2012-2015

If we go back to the previous Bull Run, we can see that the MC fell below the RC in February 2012. This also marks the absolute low point before the start of the bull run.

RC corresponds to 64% MC in October 2012 and 73% in July 2013. The remainder is below 50% in the bull cycle.

Source: Glass knot

Conclude

The data shows more sales losses in the current bull run than in previous ones. This caused a significant decrease in RC. In addition, the current RC / MC ratio has marked local lows in history.

SN_Nour

According to Beincrypto

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