Is $135,000 Bitcoin’s Current Ceiling? This Model Says So
19 November 2024 - 4:30AM
NEWSBTC
The CryptoQuant founder has shared a model for Bitcoin that
suggests the cryptocurrency’s maximum price could lie around
$135,000 right now. Bitcoin Model Established On Realized Cap Could
Reveal Price Ceiling & Floor In a new post on X, CryptoQuant
founder and CEO Ki Young Ju has discussed about a BTC pricing model
that’s based on the Realized Cap. The “Realized Cap” here refers to
an on-chain valuation model for Bitcoin that assumes the ‘real’
value of any coin in circulation is the price at which it was last
transacted on the blockchain. Related Reading: Dogecoin Price Down
7%, But Whales Continue To Buy For any token, its last transfer is
likely to represent the last instance of it changing hands, so the
price at its time could be considered as the token’s current cost
basis. As such, the Realized Cap is a sum of the cost basis of all
coins on the network. Put another way, the Realized Cap measures
the total amount of capital that the holders of the cryptocurrency
as a whole have invested into it. A new metric can be derived from
this indicator by dividing it by the total circulating supply,
representing the cost basis for the average token or investor on
the chain. This indicator is known as the Realized Price. In the
context of the current topic, the Realized Price itself isn’t of
interest, but its two multipliers are: 3.9x and 0.75x. Below is the
chart shared by Young Ju that shows the trend in these two
multipliers of the Realized Price over the history of Bitcoin. In
the graph, the CryptoQuant founder has marked the 3.9x multiplier
of the Realized Price as BTC’s “ceiling price.” Similarly, the
0.75x multiplier represents the “floor price.” An inspection of the
trend in the indicator during the past cycles reveals why the
analyst has chosen to do so. It turns out that the asset has
generally topped at or slightly above the 3.9x multiplier, while it
has reached bottoms at or slightly under the 0.75x multiplier. At
present, the ceiling price for the asset is sitting at a value of
around $135,741, while the floor price at $26,104. Bitcoin is much
higher than the latter right now, but there is also an appreciable
distance to the former. Related Reading: Bitcoin Retail Is Finally
Back: These Metrics Point To An Explosion In Interest This means
that at the current amount of capital invested into the
cryptocurrency, it still has room for growth, at least going by the
pattern observed throughout history. Naturally, the ceiling price
isn’t something that’s certain to remain where it is now for the
rest of the bull run, since any further fresh capital inflows into
the asset would raise it. But for now, under $136,000 is looking
like Bitcoin’s upper limit. BTC Price The Bitcoin rally has hit a
pause button recently as the coin’s value is still trading around
$90,000 right now. Featured image from Dall-E, CryptoQuant.com,
chart from TradingView.com
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