Here’s What This Means for Price Action

With Bitcoin realized cap reaching a new all-time high, the market might require higher capital inflow to push prices up.

Notably, Bitcoin’s realized cap recently hit a new peak of about $850 billion amid a significant inflow of capital into the market, up from the $832 billion peak from last month. The surge in realized cap comes on the back of the inflows recorded by spot Bitcoin ETFs since their launch last January.

Bitcoin Realized Cap Peak: Impact on Price Action

This surge in realized cap, which has absorbed over $450 billion since the market bottomed in November 2022, highlights growing investor confidence. However, with rising valuations comes increased inertia, according to market analytics resource Glassnode.

As #Bitcoin‘s valuation grows, so does its inertia – requiring ever-larger inflows to sustain market cap expansion. Since the Nov 2022 cycle low of $400B, Realized Cap has absorbed +$450B in capital, now totaling ~$850B: https://t.co/EfwTWxSu9f pic.twitter.com/8lMpeAZzVZ

— glassnode (@glassnode) February 5, 2025

Notably, this entails that the market now requires more capital inflows to sustain Bitcoin’s price growth. For the uninitiated, realized cap calculates Bitcoin’s total market value based on the price at which each coin last moved, rather than its current market price. 

When realized cap rises, it suggests that more money is entering the market as investors buy coins at higher prices. The recent record high of $850 billion shows strong capital inflows. However, maintaining this level requires sustained buying pressure, which can slow price growth if demand does not keep up.  

Further, Glassnode also pointed out that Bitcoin is now settling an average of $8.7 billion in daily transactions, totaling $3.2 trillion over the past year. Notably, the analytical firm affirmed that this supports Bitcoin’s role as a large-scale medium of exchange. 

Yet, as realized cap climbs, Bitcoin needs increasingly larger inflows to push its price higher, making strong price surges more difficult without fresh capital despite the increase in daily transactions.

Bitcoin Market Uncertainties Persist

Meanwhile, as Bitcoin falls below $100,000 again, market uncertainties persist. Notably, in a recent CryptoQuant analysis, market commentator XBTManager highlighted a recent major movement of Bitcoin tokens from long-dormant wallets. 

According to him, a total of 49,700 BTC from the 6–12-month age band was spent, showing potential selling pressure. It is important to note that when large amounts of older Bitcoin move, it often leads to market volatility.  

XBTManager noted that this could result in increased selling in the coming days, possibly leading to short-term price declines. Panic selling by retail investors could drive prices lower, only for them to rebound later as larger players absorb liquidity.   

In addition, Trade4ddict, another market analyst, pointed out today that Bitcoin is currently ranging between $90,000 and $108,000. Currently, Bitcoin changes hands at $98,421, down 0.61% in the last 24 hours. Despite the strong realized cap growth, the market remains indecisive, with no clear bullish reversal signals yet.  

Markets still extremely indecisive with $BTC chopping around inside the range between 90k and 108k

Still no clean bull reversal signals for me. The chance of a revisit of the 90k range low is still there

Same with traditional markets. They look indecisive as well and with all… pic.twitter.com/n4t0WRBQp6

— Trade4ddict (@Trade4ddict) February 5, 2025

The analyst also stressed that traditional financial markets are similarly uncertain, partly due to upcoming policy changes. Given this uncertainty, he advised staying patient and avoiding leveraged trades. He suggested he would buy another dip if Bitcoin revisits the lower range near $90,000.