The realized price of Bitcoin (BTC), often considered the average purchase price in on-chain analysis, plays a crucial role in determining investor sentiment. By dividing the realized price into short-term holders (STH) and long-term holders (LTH) based on holding periods, we can derive the average purchase price for each group. This is significant as "loss aversion" often drives people to sell when the price reaches their realized price.

Throughout 2022, the STH realized price acted as a resistance level for BTC, turning into a support level in early 2023 before recently reverting to a resistance level. Currently, BTC's price hovers around $25,000, positioned between the STH realized price of $28,000 and the LTH realized price of $22,400. In conclusion, for both short- and long-term investor sentiment to truly recover, BTC's price must remain above the LTH realized price and break back above the STH realized price.