Bitcoin's Most Reliable Buy Signal Just Triggered
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I bought Bitcoin this week for the first time in months — and it all comes down to one metric: the realized price.
Bitcoin's realized price tracks the average cost basis of every Bitcoin in existence. Think of it like a VWAP anchored to inception, applied across every coin out there.
When Bitcoin drops below this level, it means the average holder is underwater. Most Bitcoin in the world is sitting at a loss.
That might sound like a bad thing. But historically, it's exactly what happens at the bottom of crypto bear markets - the "ugh, get me out" phase.
Here's what that looks like on a chart:
The colorful line is Bitcoin's price. The orange line beneath it is the realized price. And the white line simply measures how far above or below price is relative to that realized price.
The data might seem complex, but the concept is dead simple: buy when people are losing money.
That's precisely what we were doing in the second half of 2022. From there, Bitcoin climbed over 600%.
Now, this doesn't mean a definitive bottom is in - far from it. Bitcoin has traded below its realized price for months, even quarters, in prior cycles.
But longer-term, these are the single best buying opportunities the crypto market ever offers.
And that's why, for the first time in months, I've started buying Bitcoin.
This Week in All Star Charts Crypto
On Monday, I talked about how the MicroStrategy panic is overblown.
This company isn't blowing up anytime soon.
On Tuesday, I outlined how to find the best 1% trades in the crypto market.
And I gave the example of Hyperliquid, which is up +50% in recent weeks while crypto is getting killed.
To find these trades, it's easier than you think.
On Wednesday, I outlined a major investment theme that isn't getting enough attention.
The separation of abundance and scarcity.
It's the story that's defining this entire correction in crypto and software.
On Thursday, I jokingly said I've hidden the sell button.
When Bitcoin is trading at these discounts, I'm always a buyer and rarely a seller.
Bitcoin is trading a major level you need to be aware of.
On Friday, I released the framework you need to understand to make the most of this opportunity.
Crypto bear markets reveal exactly what you need to buy next on the recovery.
Here are the characteristics I'm looking out for.
On Saturday, I addressed how we don't need to know who blew up.
Nobody knows and the sooner you're comfortable with that, the better you'll trade and invest.
Have a fantastic Sunday.
Cheers
Louis Sykes
Senior Crypto Analyst, All Star Charts
