Understanding Realised Price

Realised Price is the average price at which all existing tokens were purchased (moved last time). If the realised price is higher than the current market price, this indicates that most of the coins are now held at a loss. If the realised price is lower than the market price, it means that most of the supply is holding at a profit.

How is it calculated?

$$\text{Realised Price} = \frac{\text{Realised Cap}}{\text{Current Supply}} = \frac{\sum_{\text{over all holders}} \big( \text{price}_{\text{purchase}} * \text{balance} \big)}{\sum_{\text{over all holders}} \text{balance} }$$

Guidance for Use in Trading

The Realised Price often acts as a psychological barrier for market participants. Here’s how it plays out in different scenarios:

Case 1: 📉 Market Price Above Realised Price

When the Market Price is above the Realised Price and then drops to this level:

• Selling Pressure: As the price approaches the Realised Price, holders of coins at a profit may start selling, increasing supply.

• Buying Interest: Other investors might see this as an opportunity to buy if they expect further price corrections.

This dynamic redistributes tokens between sellers and buyers. Once the price crosses below the Realised Price, remaining holders might wait for a price rebound, leading to a possible drop in market supply and a potential price reversal.

Case Study: the SHIB during the bull run in 2021-22.

Case 2: 📈 Market Price Below Realised Price

When the Market Price is below the Realised Price and rises to this level:

• Selling Pressure: Investors who are at a loss might sell their holdings when the price hits the break-even point.

• Buying Interest: Conversely, an uptrend might attract new buyers.

The price movement around the Realised Price will be influenced by these opposing forces. If the price breaks through this level, it might not stabilize at it for long.