Bitcoin valuation bands

Chart of Bitcoin's price against its long-term valuation levels: the realized price, the 200-week moving average and the power law trend with its corridor, since 2010.

What is Bitcoin's realized price?

It is the average price at which all bitcoins in circulation last moved, an approximation of what their owners paid on average. When the price falls below it, the average holder is at a loss, something that has only happened near the bottom of each cycle: in 2015, 2018-2019, March 2020 and 2022, when the price was between 12% and 44% below it. At the tops, by contrast, the price reached 2.3 to 4.7 times the realized price.

What is the short-term holder realized price?

It is the same calculation, but only for coins that moved in the last 150 days: the average cost of recent buyers. It moves much faster than the overall realized price. In bull years such as 2016, 2017, 2020, 2023 and 2024, the price stayed above it most of the time (77% to 98% of days); at the 2015, 2018, 2020 and 2022 bottoms it fell 22% to 48% below it, leaving recent buyers at a loss.

Why does the 200-week moving average matter?

It is the average price over about four years, roughly one full halving cycle. It has acted as major long-term support: the bottoms of 2015, 2018 and 2020 formed very close to it, and only in 2022 did the price fall clearly below it (by 34%).

What is the Bitcoin power law?

It is the straight line that best fits Bitcoin's price when both the price and the days since the genesis block are drawn on a logarithmic scale. It describes growth that slows down over time. The shaded corridor contains 95% of days since 2013: cycle bottoms have landed near its lower edge, at ×0.45 to ×0.6 of the trend, while each top has come closer to it than the one before.

How should you use them?

None of these references predicts the price, but together they help gauge whether Bitcoin is expensive or cheap relative to its own history. The Is BTC Cheap? index uses MVRV (the ratio between price and realized price), the distance to the 200-week moving average and the power law deviation, along with other metrics.