A Realized Price Breakdown occurs when an asset’s market price falls below its realized price, which represents the average cost basis at which all coins on the network were last moved. This event signifies that the average investor is holding the asset at a loss. Historically, a breakdown below the realized price has often marked periods of significant market stress and potential capitulation. It indicates that aggregate investor profitability has turned negative.
Context
The Realized Price Breakdown is a key on-chain metric used by analysts to identify potential market bottoms in cryptocurrency cycles. News reports frequently highlight this event as a strong bearish signal, often preceding periods of intense selling pressure. The discussion often revolves around the historical accuracy of this indicator and its implications for short-term and long-term market sentiment.
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