The on-chain analytics firm Glassnode revealed in its latest weekly report that demand for Bitcoin has slowed recently.

In its new report, Glassnode has discussed the latest development in the Bitcoin Realized Cap. The “Realized Cap” refers to an on-chain capitalization model for BTC that calculates the asset’s value by assuming the value of each coin in circulation to be equal to the spot price at which it was last moved on the blockchain.

As the last transfer on the network for any coin was probably the last time it changed hands, the price at that time could be assumed to be its current cost basis. As such, the Realized Cap is a total sum for the cost basis of the entire circulating supply.

In other words, this model represents the total capital that the investors used to purchase Bitcoin. Because of this, this metric is used to track whether capital is flowing into or out of the cryptocurrency.

Here is the chart shared by Glassnode that shows the trend in the Bitcoin Realized Cap over the last few years:

As displayed in the above graph, the Bitcoin Realized Cap had been riding a sharp uptrend earlier when the rally toward the new all-time high (ATH) took place. This rapid growth naturally implied that capital was aggressively flowing into the asset.

Recently, though, the metric’s trajectory has become less steep. Its value is still growing, and new ATHs are being set, but it’s clear that the increase is much smaller in scale than earlier.

“Currently, the rate at which new capital is flowing into the Bitcoin network has slowed down considerably from its peak as the market digests the recently distributed supply,” reads the report.

The chart below better represents how the rate of change of capital flowing into the sector has changed recently.

When investors sell at a net profit, the Realized Cap increases as there is some demand to buy the coins at a higher price. On the other hand, the metric heads down when loss realization occurs, as coins previously purchased with a higher amount of capital have been sold for a lower amount of capital, thus bringing the total investment in the cryptocurrency down.

As the Bitcoin Net Realized Profit/Loss graph shows, the market absorbed a large amount of profits when the ATH formed. Since then, though, the metric has cooled off considerably, further showcasing the lower demand in the sector.

Bitcoin surpassed the $71,000 level yesterday, but the asset appears to have dropped today as it’s now back at $70,200.

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