UnRealizedCap_relative

Tech spec

Brief Description: The total unrealized market capitalization as % of market cap.

UnRealizedCap_relative is a metric utilized in Bitcoin's on-chain analysis that measures the portion of total Bitcoin market value that is composed of unrealized gains or losses. This metric is derived by assessing the difference between Bitcoin's market capitalization and its realized capitalization, ultimately expressing this difference as a percentage of the market cap. It highlights the potential Bitcoin value that investors have not yet converted into cash or other assets.

Metric variants

• _lth: UnRealizedCap_relative restricted to Long-Term Holders (age ≥ 155 days).
• _sth: UnRealizedCap_relative restricted to Short-Term Holders (age < 155 days).

Interpretation UnRealizedCap_relative allows for a nuanced understanding of the current sentiment and behavior of Bitcoin investors. When UnRealizedCap_relative is high, it suggests a market with a strong potential for profit-taking, as a substantial portion of the holdings would yield gains at the current market price. This could indicate a market top if investors decide to realize gains due to heightened optimism. Conversely, a low UnRealizedCap_relative could suggest that investors are holding coins at a loss or meager profit, possibly signaling undervalued conditions or market bottoms, as there is less incentive for selling.

Advanced Explanation UnRealizedCap_relative is calculated by subtracting the RealizedCap from the MarketCap, and then this result, called UnrealizedCap, is expressed as a percentage of the MarketCap. The significance lies in providing a quantitative view of how much potential profit, or in some cases losses, remain on paper rather than being captured by selling.

UnrealizedCap = MarketCap - RealizedCap
UnRealizedCap_relative = (UnrealizedCap / MarketCap) * 100