RPLR Crosses Into Bullish Territory: BTC On-Chain Analysis

Be[in]Crypto takes a look at on-chain indicators for Bitcoin (BTC). More specifically, the Realized Price-to-Liveliness Ratio.

What is the realized BTC price?

The realized price is an on-chain indicator that measures the BTC price at the last time it moved rather than at the current price. It is considered an accurate way of measuring the real value since it reduces the importance of lost coins or those that have been held for several years.

The actual BTC price very rarely falls below the realized one. More recently, it has done so in July 2018 and March 2020 (black circles). Currently, it is at $24,450, roughly $20,000 below the actual price.
Therefore, the total BTC in existence last moved at an average price of $24,450.

Liveliness

Liveliness is an on-chain indicator that is created by the cumulative sum of coin-days destroyed and that of coin-days created.

It gives a value between zero and one. Readings close to zero suggest that old coins are not being spent. The opposite is true for readings close to one.

Besides actual value, the more important reading is the direction of the trend. A decreasing trend suggests that older coins remain dormant. The opposite is true for an increasing trend. 

Liveliness has been falling since July 30 2021 (black circle), when it reached an all-time high of 0.623.

This suggests that younger coins are being spent throughout the current BTC price rally.

Realized Price-to-Liveliness Ratio

The Realized Price-to-Liveliness Ratio (RPLR) is a metric that compares the two previously outlined indicators.

When more investors are HODLing, fewer coin days are destroyed. Therefore, liveliness drops, and RPLR in turn moves higher. Historically, the BTC price has moved above and below RPLR (orange) numerous times.

However, an interesting observation is a fact that once a bull run begins, the price tends to bounce at the RPLR line instead of breaking down (black circles). This was the case twice in 2017 and once in Sept 2021, prior to the acceleration of the upward movement.

Once it finally breaks down, it means that the bull run is complete.

The price bounced at this line in July 2021. This marked the end of a nearly three-month corrective period.

In Jan 2022, the BTC price seemingly broke down below the RLPR line. However, it has bounced since, rendering the breakdown as only a deviation.

Therefore, when comparing this to the previous movement, it is possible to say that the bull run is still intact since the BTC price has not decisively broken down below RPLR.

For Be[in]Crypto’s latest Bitcoin (BTC) analysis, click here