Realized Cap values each coin at the USD price when it last moved on-chain, then sums that value across the current UTXO set. It is an aggregate on-chain cost basis for held supply, so it reprices transaction by transaction rather than marking the full float to spot.
A rising series usually means supply is being reset at higher effective prices, while flat behavior means older cost bases still dominate and little value is being repriced. It is most informative beside Market Cap, Realized Price, and MVRV, where the analyst is separating spot revaluation from turnover of the supply base.
The limitation is behavioral, not arithmetic. Realized Cap only updates on recorded on-chain movement, so internal exchange reshuffles, consolidations, or custody transfers can reprice supply mechanically, while off-chain ownership changes do nothing at all. It tracks on-chain repricing, not a perfect ledger of investor entry prices.
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