The creators of one of the leading on-chain analytics firms say that the odds are stacked for a considerable move to the upside for Bitcoin (BTC) sooner than traders think. In Glassnode’s latest newsletter, Jan Happel and Yann Allemann say that while price action looks bleak currently, an unexpected change in policy from the Fed […]
The post Pronounced Bitcoin (BTC) Move Impending, According to Glassnode Co-Founders – Here’s When appeared first on The Daily Hodl.
Market intelligence firm Glassnode is assessing a trio of crypto assets as the markets seek to end the week on a positive note. In its latest analysis, Glassnode says nearly half of the Bitcoin (BTC) located in non-exchange wallets are sitting on unrealized losses. According to Glassnode, nearly 60% of those owners are considered long-term […]
The post Crypto Analytics Firm Glassnode Says Nearly Half of Bitcoin (BTC) Holders at a Loss, Evaluates ETH and USDT appeared first on The Daily Hodl.
A popular crypto analyst says one under-the-radar Bitcoin (BTC) metric is approaching a positive trend that’s been unseen for years. In a new video, the anonymous host of InvestAnswers tells his 442,000 YouTube subscribers that Bitcoin withdrawals are about to exceed deposits for the first time in five or six years. “Over the last five or […]
The post Under-the-Radar Metric Flashing Green for First Time in Years Could Bode Well for Bitcoin, Says InvestAnswers appeared first on The Daily Hodl.
Active addresses, entities, and transactions on the Bitcoin network are all moving sideways while the number of wallets holding at least some of the assets continues to reach new highs.
So-called “market tourists” are fleeing from Bitcoin (BTC), leaving only long-term investors holding and transacting in the top cryptocurrency, according to blockchain analytics firm Glassnode.
In its July 4 Week Onchain report, Glassnode analysts said June saw Bitcoin have one of its worst-performing months in 11 years, with a loss of 37.9%. It added activity on the Bitcoin network is at levels concurrent with the deepest part of the bear market in 2018 and 2019, writing:
“The Bitcoin network is approaching a state where almost all speculative entities, and market tourists have been completely purged from the asset.”
However, despite the almost complete purge of “tourists,” Glassnode noted significant accumulation levels, stating that the balances of shrimps — those holding less than 1 BTC, and whales — those with 1,000 to 5,000 BTC, were “increasing meaningfully.”
Shrimps, in particular, see the current Bitcoin prices as attractive and are accumulating it at a rate of almost 60,500 BTC per month, which Glassnode says is “the most aggressive rate in history,” equivalent to 0.32% of the BTC supply per month.
Explaining the purge of these tourist-type investors, Glassnode revealed that both the number of active addresses and entities have seen a downtrend since November 2021, implying new and existing investors alike are not interacting with the network.
Address activity has fallen from over 1 million daily active addresses in November 2021 to around 870,000 per day over the past week. Similarly, active entities, a collation of multiple addresses owned by the same person or institution, are now approximately 244,000 per day, which Glassnode says is around the “lower end of the ‘Low Activity’ channel typical of bear markets.”
“A retention of HODLers is more evident in this metric, as Active Entities is generally trending sideways, indicative of a stable base-load of users,” the analysts added.
The growth of new entities has also dived to lows from the 2018 to 2019 bear market, with the user-base of Bitcoin hitting 7,000 daily net new entities.
The transaction count remains “stagnant and sideways,” which indicates a lack of new demand but also means that holders are being retained through the market conditions.
Related: Institutional investors shorting Bitcoin made up 80% of weekly inflows
Driving home its point, Glassnode concluded that the number of addresses with a non-zero balance, those that hold at least some Bitcoin, continues to hit all-time-highs and is currently sitting at over 42.3 million addresses.
Past bear markets saw a purge of wallets when the price of Bitcoin collapsed. Still, with this metric indicating otherwise, Glassnode says it shows an “increasing level of resolve amongst the average Bitcoin participant.”
The crypto economy has slipped under the $1 trillion mark to the $970 billion range, as a large number of digital currencies have lost more than half their USD worth since November 2021. Bitcoin is down 70% from the all-time high last year, and a new report from Glassnode Insights calls the current bear market […]
Bitcoin’s derivatives metrics reflect slight improvements since the $17,600 low, but whales and market makers continue to price higher risk of another breakdown.
A mild sense of hope emerged among Bitcoin (BTC) investors after the June 18 drop to $17,600 becomes more distant and an early ascending pattern points toward $21,000 in the short-term.
Recent negative remarks from lawmakers continued to curb investor optimism. In an interview with Cointelegraph, Swiss National Bank (SNB) deputy head Thomas Muser said that the decentralized finance (DeFi) ecosystem would cease to exist if current financial regulations are implemented in the crypto industry.
An article published in The People's Daily on June 26 mentioned the Terra (LUNA), now renamed Terra Classic (LUNC), network's collapse and local blockchain expert Yifan He referring to crypto as a Ponzi scheme. When asked by Cointelegraph to clarify the statement on June 27, Yifan He stated that "all unregulated cryptocurrencies including Bitcoin are Ponzi schemes based on my understanding."
On June 24, Sopnendu Mohanty the chief fintech officer of the Monetary Authority of Singapore (MAS) pledged to be "brutal and unrelentingly hard" on any "bad behavior" from the cryptocurrency industry.
Ultimately, Bitcoin investors face mixed sentiment as some think the bottom is in and $20,000 is support. Meanwhile, others fear the impact that a global recession could have on risk assets. For this reason, traders should analyze derivatives markets data to understand if traders are pricing higher odds of a downturn.
Retail traders usually avoid monthly futures because their price differs from regular spot markets at Coinbase, Bitstamp and Kraken. Still, those are professional traders' preferred instruments as they avoid the funding rate fluctuation of the perpetual contracts.
These fixed-month contracts usually trade at a slight premium to spot markets because investors demand more money to withhold the settlement. Consequently, futures should trade at a 5% to 10% annualized premium in healthy markets. One should note that this feature is not exclusive to crypto markets.
Whenever this indicator fades or turns negative, this is an alarming, bearish red flag signaling a situation known as backwardation. The fact that the average premium barely touched the negative area while Bitcoin traded down to $17,600 is remarkable.
Despite currently holding an extremely low futures premium (basis rate), the market has kept a balanced demand between leverage buyers and sellers.
To exclude externalities specific to the futures instrument, traders must also analyze the Bitcoin options markets. For instance, the 25% delta skew shows when Bitcoin whales and arbitrage desks are overcharging for downside or upside protection.
During bearish markets, options investors give higher odds for a price crash, causing the skew indicator to rise above 12%. On the other hand, a market's generalized FOMO induces a negative 12% skew.
After peaking at 36% on June 18, the highest-ever record, the indicator receded to the current 15%. Options markets have shown an extreme risk-aversion until June 25, when the 25% delta skew finally broke below 18%.
The current 25% skew indicator continues to display higher risks of a downside from professional traders but it no longer sits at levels that reflecti extreme risk aversion.
Related: Celsius Network hires advisers ahead of potential bankruptcy — Report
Some metrics suggest that Bitcoin may have bottomed on June 18 after miners sold significant quantities of BTC. According to Cointelegraph, this indicates that capitulation has occurred already and Glassnode, an on-chain analysis firm, demonstrated that the Bitcoin Mayer Multiple fell below 0.5, which is extremely rare and hasn't happened since 2015.
Whales and arbitrage desks might take some time to adjust after key players like Three Arrows Capital face serious contraction and liquidation risks due to a lack of liquidity or excessive leverage. Until there's enough evidence that the contagion risk is alleviated, Bitcoin price probably continue to trade below $22,000.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Cryptocurrency-related lending has become a black smudge for the industry these days and according to a recent report, bitcoin’s low price has put billions in mining loans under stress. The report, which quotes the co-founder of mining company Luxor Technologies, Ethan Vera, says that roughly $4 billion in loans backed by crypto mining rigs are […]
Recent on-chain analysis by Glassnode has shown that the current Bitcoin bear cycle is playing out as the worst one in history.
Several factors have contributed to making the current crypto bear market the worst ever recorded as most Bitcoin traders are underwater and continue to sell at a loss, according to Glassnode.
Blockchain analysis firm Glassnode’s June 24 report titled A Bear of Historic Proportions outlines how Bitcoin’s current dip below the 200-day moving average (MA), negative deviation from realized price, and net realized losses have conspired to make 2022 the worst in Bitcoin’s history.
“In the midst of this, Bitcoin and Ethereum have both traded below their previous cycle ATHs which is a first in history. “
The first and most obvious indication of a bear market is when the spot price of Bitcoin (BTC) falls below the 200-day MA and an even more extreme scenario, the 200-week MA. To highlight how rare the current price levels are, Glassnode showed that during the 2022 bear market, Bitcoin has fallen below half the 200-day MA level.
Glassnode also demonstrated that falling below 0.5 the Mayer Multiple (MM) is an exceedingly rare occasion that hasn’t happened since 2015. The MM factors in price changes above and below the 200-day MA to show overbought or oversold conditions. The report states, “Only 84 out of 4160 trading days (2%) have recorded a closing MM value below 0.5.”
“For the first time in history, the 2021-22 cycle has recorded a lower MM value (0.487) than the previous cycle's low (0.511).”
Confirming the severity of current market conditions is the spot price falling below the realized price, which has forced traders to increasingly sell their coins at a loss. Glassnode noted that such a cascade effect is “typical of bear markets and market capitulations.”
Glassnode said instances when spot prices trade below the realized price are uncommon, noting that this is only the third time this has happened in the last six years and the fifth time it's happened since Bitcoin’s launch in 2009.
“Spot prices are currently trading at an 11.3% discount to the realized price, signifying that the average market participant is now underwater on their position.”
The rarity of this event is illustrated by Glassnode’s model showing that just 13.9% of all Bitcoin trading days have seen spot prices dip below realized prices.
These conditions are exacerbated by investors locking in their losses on the largest crypto by market cap. When Bitcoin fell below the $20,000 mark in June 2022, Glassnode wrote that BTC investors locked in “the largest daily USD denominated realized loss in history.”
“Investors collectively locked in a loss of -$4.234B in a single day, which is a 22.5% increase from the previous record of $3.457B set in mid-2021.”
Factoring in all the negative metrics, Glassnode assesses that the market is in the midst of a capitulation event. Cointelegraph corroborated this assessment on June 24 by pointing out that miners have started selling their stacks which is another indicator that capitulation has taken place. Such events often signify the bottom price range of a cycle.
Related: 5 indicators traders can use to know when a crypto bear market is ending
BTC is currently down 70% from its November 2021 high, trading at $21,207 according to CoinGecko.
Crypto analytics firm Glassnode finds that over half a million Bitcoin (BTC) were sold at a loss as panic sweeps across the digital asset landscape. In a new detailed analysis, Glassnode says that over a three-day period, Bitcoin sellers racked up more than $7.32 billion in losses as they scurried to the exits while unloading […]
The post Bitcoin Investors Lock in Over $7,325,000,000 in Losses Amid Three Days of Deep Capitulation: Glassnode appeared first on The Daily Hodl.
Market intelligence firm Glassnode says one particular niche within the decentralized finance (DeFi) sector remains robust despite crypto market woes. In a new analysis, Glassnode says capital has been pouring into stablecoins while many Ethereum (ETH) holders are currently underwater. “The aggregate capitalization of the top four stablecoins (USDT, USDC, BUSD and DAI) have also […]
The post Glassnode Says One Crypto Asset Class Is Gaining Massive Popularity Amid Huge Ethereum (ETH) Unrealized Losses appeared first on The Daily Hodl.
