{"uuid":"31d53f31-2002-4761-53a5-fe58272d3945","categoryUuid":"752fce11-1913-47e4-5707-91c0b669f02b","data":{"meta":{"name":"BTC: Capital Flows Primer"},"configs":[{"meta":{"content":"### Realized Profit and Loss\n\n---\n\nRealized Profit and Loss is one of the more powerful and unique tools within the discipline of on-chain analysis. It utilizes a concept called Pricestamping, where each coin (or UTXO) is assigned a price (and thus USD value) when it is spent on-chain.\n\nFrom this, we can calculate the difference between the value at the time of disposal, and at the time of acquisition.\n\n- 🟢 Coins spent above acquisition value Realized a Profit\n- 🔴 Coins spent below acquisition value Realized a Loss\n\nThese tools allow for inspection of the capital inflows and outflows from the asset, and also provide indicators for both shorter and longer term sentiment across the market.\n\n\n\n---\n\n### Net Realized Profit and Loss\n\n---\n\nBy calculating the difference between the Realized Profit and Realized Loss on any given day, we can produce the Net Realized Profit / Loss metric, which provides a view on both macro trend, shifts in market sentiment, and the directional dominance of value flowing in/out of the network.\n\n- Positive values indicate capital is flowing into the asset, typical of positive price momentum.\n\n- Negative values indicate capital is flowing out of the asset, typical of negative price momentum."},"uuid":"6ed05988-b9cf-4319-b0fe-1b695bbc2756","extra":{"backgroundColor":"#ffffff"},"configType":"content"},{"meta":{"refUuid":"3e6fb7eb-7888-4e48-69c4-ea0f18cb5181"},"uuid":"7ddf299d-03a5-44c5-90e6-803990a9dc2c","extra":{"zoom":"5y"},"configType":"workbench"},{"meta":{"date":1706659200000,"asset":"BTC","since":1279324800000,"until":1706659200000,"mathFn":{"name":"sma","value":"7"},"currency":"native","metricCode":"indicators.NetRealizedProfitLoss","resolution":"24h","movingMedian":0,"movingAverage":"7","expMovingAverage":0},"uuid":"e38bddcd-f0b4-485f-ab25-3ffe3d247698","extra":{"zoom":"5y","price":true,"scale":"lin","lineColor":"#f7931a","chartStyle":"line"},"configType":"metric"},{"meta":{"content":"### The Realized Cap\n\n---\n\nThus the Realized Cap can be considered as the cumulative sum of all Realized Profits minus Realized Losses. In other words, it is the aggregate value that has flowed into Bitcoin on-chain, minus capital flowing out via losses. It tends to move in two distinct regimes:\n\n- Steep and sharp repricing higher during bull markets as investors who accumulate cheap coins in the bear market distribute coins to new buyers at elevated and increasingly expensive prices.\n\n- Sideways plateaus and declines in bear markets as expensive coins are revalued lower until complete investor capitulation takes place. This has historically accompanied a lengthy market consolidation where coins transact and gradually change hands, moving back towards higher conviction holders. "},"uuid":"cfec17d1-d2be-4ec1-a5ec-bb8f55d6c85e","extra":{"backgroundColor":"#ffffff"},"configType":"content"},{"meta":{"date":1706659200000,"asset":"BTC","since":1230940800000,"until":1706659200000,"currency":"native","metricCode":"market.MarketcapRealizedUsd","resolution":"24h"},"uuid":"f85aad17-8155-4f03-b46c-51d857e42012","extra":{"zoom":"5y","price":true,"scale":"lin","lineColor":"#f7931a","chartStyle":"line"},"configType":"metric"},{"meta":{"refUuid":"ba1ec93d-85f4-41fe-5606-798a2f30013a"},"uuid":"7e38380e-ca52-44ae-a90f-9b7d849caed4","configType":"workbench"},{"meta":{"refUuid":"54a402d5-6991-4b22-41ce-ae7fe3380641"},"uuid":"ae280a97-c1b7-4c88-81f3-872b1adfd57d","extra":{"zoom":"5y"},"configType":"workbench"},{"meta":{"content":"### The Realized Price\n\n---\n\nIn traditional finance, one method to evaluate the value of an asset is to assess its market capitalization. In the on-chain world, we are able to calculate the realized cap by multiplying each coin in the circulating supply by the last price it moved, and summing the values together.\n\nTherefore, by dividing the Realized Cap by all coins in circulation, we are able to obtain the average acquisition price of a coin, providing insight into the positioning of the average market participant.\n\n---\n\n### Long and Short-Term Holder Realized Price\n\n--- \n\nDue to timestamping, we are able to assess the age of all coins on the network based on when they last moved. By partitioning the supply for coins above, and below a 155d threshold, we are able to evaluate these two new cohorts Cost-Basis based on holding time. This provides insight into the positioning of specific cohorts of market participants with differing principles.\n\nBy tracking coins under 155days old, we can evaluate the Short-Term Holder cohort Cost-Basis, which represent recent buyers or new demand and are much more sensitive to price fluctuations.\n\nBy tracking coins above 155 days old, we can evaluate the Long-term Holder cohort Cost-Basis, which represent mature investors or smart money. This investor group is considered significantly less price sensitive than its sister cohort, the Short-Term Holders, and operates on a multi-year time scale."},"uuid":"a578fe3b-1ee9-4485-8f1f-e976aa249b9d","extra":{"backgroundColor":"#ffffff"},"configType":"content"},{"meta":{"content":"### The MVRV Ratio\n\n---\n\nMVRV is shorthand for Market Value (MV) to Realized Value (RV), and is the ratio between Price, and the Realized Price. Since the Realized Price is the average price at which every coin last moved on-chain, MVRV can be thought of as a measure of 'Unrealized Profit' held within the supply.\n\n*This chart reflects MVRV - 1 to produce an equilibrium value of 0, instead of 1*\n\n\n- An (MVRV - 1) value of 1.2 means on aggregate, each coin holds Unrealized 120% Profit\n\n- An (MVRV - 1) value of 0 means Break-Even, there is no Unrealized Profit or Loss\n\n- An (MVRV - 1) value of -0.2 means on aggregate, each coin holds -20% Unrealized Loss\n\n- High MVRV - 1 Values (\u003e 1.4) ↗️ indicate the market holds large unrealized profits, typical of bull markets.\n\n- Low MVRV - 1 Values (\u003c 0) ↘️ indicate the market holds unrealized losses, typical of deep bear markets."},"uuid":"5bfda624-f6c2-41d6-b432-1c55100ca9a9","extra":{"backgroundColor":"#ffffff"},"configType":"content"},{"meta":{"refUuid":"1b84bfc0-312e-4021-7627-a2accbe0c1ee"},"uuid":"89154ad0-d4ef-4157-86be-c9625d7aa149","configType":"workbench"},{"meta":{"content":"### Percent Supply in Profit\n\n---\n\nDue to free auditing of the Bitcoin supply, we are able to leverage pricestamping once more to evaluate whether each coin is in a profitable position, or one of loss. \n\nIn contrast to the MVRV Ratio which allows us to analyze the absolute magnitude of unrealized profit or loss per coin, the Percent Supply in profit allows us to evaluate the relative percentage of coins which are in a profitable position.\n\n- A value of 100% means all coins are in a profitable position.\n\n- Values below 60% have historically aligned with a deep bear market, as a significant portion of coins are holding unrealized losses.\n\n- Values above 90% have historically aligned with a prime bull market, as the majority of the market holds unrealized profits."},"uuid":"fe754b76-fa2b-4b57-be1f-bbc928fd3084","extra":{"backgroundColor":"#ffffff"},"configType":"content"},{"meta":{"date":1706659200000,"asset":"BTC","since":1279411200000,"until":1706659200000,"currency":"native","metricCode":"supply.ProfitRelative","resolution":"24h"},"uuid":"b9f8dc35-948d-47db-acea-f27d58f940a9","extra":{"price":true,"scale":"lin","lineColor":"#f7931a","chartStyle":"line"},"configType":"metric"},{"meta":{"content":"### SOPR and Spent Price\n\n---\n\nBy pricestamping coins at the time they are transferred / acquired, we are able to obtain the price value for which each spent coin was originally purchased (Spent Price).\n\nComparing the purchased price to the current spot price for all coins that have moved, we are able to obtain the magnitude of profit or loss the average transferred coin has experienced. This provides insight into macro market sentiment, profitability and losses taken over a particular time-frame.\n\n*This chart reflects SOPR- 1 to produce an equilibrium value of 0, instead of 1*\n\nThis provides insight into the magnitude of profit or loss the average market participant is experiencing."},"uuid":"7ded80fd-f327-44dd-b99c-8054da79b6d0","extra":{"backgroundColor":"#ffffff"},"configType":"content"},{"meta":{"refUuid":"bf3f7740-db73-43f2-792a-f2f6aee1b29b"},"uuid":"8e7f5be3-c59f-4643-93dd-b26c34d3d62d","extra":{"zoom":"5y"},"configType":"workbench"}],"layouts":[{"h":8,"i":"6ed05988-b9cf-4319-b0fe-1b695bbc2756","w":4,"x":0,"y":0,"minH":1,"minW":3,"moved":false,"static":false},{"h":8,"i":"7ddf299d-03a5-44c5-90e6-803990a9dc2c","w":8,"x":4,"y":0,"minH":1,"minW":3,"moved":false,"static":false},{"h":8,"i":"e38bddcd-f0b4-485f-ab25-3ffe3d247698","w":12,"x":0,"y":8,"minH":1,"minW":3,"moved":false,"static":false},{"h":8,"i":"cfec17d1-d2be-4ec1-a5ec-bb8f55d6c85e","w":4,"x":0,"y":16,"minH":1,"minW":3,"moved":false,"static":false},{"h":8,"i":"f85aad17-8155-4f03-b46c-51d857e42012","w":8,"x":4,"y":16,"minH":1,"minW":3,"moved":false,"static":false},{"h":8,"i":"7e38380e-ca52-44ae-a90f-9b7d849caed4","w":12,"x":0,"y":24,"minH":1,"minW":3,"moved":false,"static":false},{"h":8,"i":"ae280a97-c1b7-4c88-81f3-872b1adfd57d","w":8,"x":4,"y":32,"minH":1,"minW":3,"moved":false,"static":false},{"h":8,"i":"a578fe3b-1ee9-4485-8f1f-e976aa249b9d","w":4,"x":0,"y":32,"minH":1,"minW":3,"moved":false,"static":false},{"h":8,"i":"5bfda624-f6c2-41d6-b432-1c55100ca9a9","w":4,"x":0,"y":40,"minH":1,"minW":3,"moved":false,"static":false},{"h":8,"i":"89154ad0-d4ef-4157-86be-c9625d7aa149","w":8,"x":4,"y":40,"minH":1,"minW":3,"moved":false,"static":false},{"h":8,"i":"fe754b76-fa2b-4b57-be1f-bbc928fd3084","w":4,"x":0,"y":48,"minH":1,"minW":3,"moved":false,"static":false},{"h":8,"i":"b9f8dc35-948d-47db-acea-f27d58f940a9","w":8,"x":4,"y":48,"minH":1,"minW":3,"moved":false,"static":false},{"h":8,"i":"7ded80fd-f327-44dd-b99c-8054da79b6d0","w":4,"x":0,"y":56,"minH":1,"minW":3,"moved":false,"static":false},{"h":8,"i":"8e7f5be3-c59f-4643-93dd-b26c34d3d62d","w":8,"x":4,"y":56,"minH":1,"minW":3,"moved":false,"static":false}]}}