This Bitcoin on-chain indicator may suggest why the $24,750 price level is an important resistance for the cryptocurrency.

The relevant indicator here is the “realized price,” to understand which, the “realized cap” needs to be looked at first. The realized cap is one of the two main capitalization models for Bitcoin (the other being the usual market cap).

According to the realized cap, the value of each coin in the circulating supply is the price at which it was last moved (and not the current BTC price, as the market cap assumes). This means that the model incorporates the cost basis (the acquisition price) of each investor into the value of the asset.

Now, if this metric is divided by the total number of coins in circulation, a sort of “realized price” can be obtained. The significance of this price is that it represents the cost basis of the average holder in the market.

The implication of this is that if the (normal) BTC price dips below the realized price, the average investor enters into a state of loss (and a state of profit for the reverse case).

While the realized cap somewhat filters out coins that haven’t moved in a long time from the valuation of Bitcoin (as their cost basis will naturally be much lower than that of more recent coins), they still influence its value.

There is an insignificant portion of the BTC supply that has simply been lost due to wallet seed phrases being lost. This supply is likely to never re-enter the market again, meaning that it shouldn’t really have any effects on the price anymore.

To circumvent this problem, Glassnode has made the “adjusted realized price” metric, as the on-chain analytics firm explained in its newly published report. This indicator introduces a simple fix for the lost coins problem: it doesn’t take into account coins that haven’t been moved since more than seven years ago.

Now, here is a chart that shows the trend in the adjusted Bitcoin realized price over the last few years:

As displayed in the above graph, the Bitcoin price already crossed above the realized price earlier in the rally, but the coin has only now reached the adjusted version.

The adjusted realized price is currently $24,750, which is about the level that the asset has been finding rejection at recently. Interestingly, the April 2019 rally, which shares a few similarities to the latest rally, also saw a slowdown when it hit the metric’s line, as is visible in the chart.

Levels like this where a large number of investors may have their cost basis close to tend to provide resistance during bearish periods as it is a preferable exit point for such holders after having suffered unrealized losses during the bear plunge previously.

At the time of writing, Bitcoin is trading around $23,900, down 1% in the last week.

Bitcoin price in Telegram @btc_price_every_hour

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