With bitcoin trading near its 200-week moving average, a long-term support indicator currently sitting around $62,400, investors are closely watching to see if the level can hold. If the 200WMA breaks, attention will likely shift to the realized price of bitcoin, currently around $53,457, which has historically served as the last line of support during major bear markets.
The realized price represents the average on-chain acquisition cost of all bitcoins in circulation and has historically served as a key support level during the depths of bear markets.
During every major bear market cycle, including 2011, 2015, 2018 to 2019, the March Crash of 2020, and 2022, bitcoin has ultimately traded just below its realized price before establishing a cycle bottom. So far, bitcoin has not fallen below this level in the current cycle.
From a psychological and sentimental perspective, capitulation tends to occur when investors see the market price falling below their cost basis. Once an asset trades below what investors paid, realized losses propagate, often leading to panic selling and extreme bearish sentiment. With a realized price near $54,000, it is reasonable to expect increased investor stress if bitcoin falls below this level.
