Analytics firm Glassnode is revealing short-term Bitcoin (BTC) holders are sitting on losses as the flagship crypto asset trades below a key psychological level. Glassnode says nearly all the short-term holders (STH), or those who have held Bitcoin for a period of fewer than 155 days, are counting losses. “At the moment, almost 58% of […]
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Bitcoin’s long-term holders are beginning to suffer losses matching those from previous bear markets, and Glassnode believes the pain may continue, and even get worse.
Long-term Bitcoin holders are sitting on their largest losses since the March 2020 capitulation and the 2018-2019 bear market but may have to keep waiting for relief.
Calculated by measuring the value of coins deposited to exchanges, aggregated realized losses from long-term holders (LTH) of Bitcoin (BTC) exceeded 0.006% of the market capitalization by May 29 according to Glassnode’s The Week Onchain report from June 6.
However, the dramatic losses may continue for some time if historic loss patterns from previous bear markets are to be repeated. From 2018 to 2019, LTH losses reached a peak of 0.015% of the market cap, and those losses extended for about a year. The current losses to long-termers have only been observed for about a month.
Glassnode writes that LTH losses now resemble those from previous bear markets, but that they need to continue for a longer period of time before being truly comparable. The report states:
“The LTH losses on coins deposited to exchanges have now reached a magnitude comparable to previous bear markets. However, we do not yet have the duration component.”
Glassnode defines LTH as a holder that has not moved their coins for at least 155 days. However, anyone that bought BTC before December 2019 will still be up on their investment … for now.
It is also worth noting that in both 2019 and 2020, prices rapidly recovered by bouncing off their lows. Cointelegraph reported on Tuesday that there will likely be a capitulation event before any significant price recovery can take place.
Despite the gloomy price outlook, inflows to digital asset investment products such as Bitcoin exchange-traded funds (ETF) topped $100 million last week. CoinShares June 6 report highlights that most of the inflows were from the Americas, suggesting that European investors are still bearish at the moment.
Related: Amid crypto bear market, institutional investors scoop up Bitcoin: CoinShares
CoinShares also pointed out the difference in exchange flows between BTC and Ethereum (ETH). BTC exchange inflows have netted about $506 million in value through 2022 so far, whereas ETH has had net outflows of $357 million. This suggests that market sentiment for ETH is much lower than that for BTC at the moment.
Bitcoin prices are down 5.3% over the past 24 hours, trading at $29,567 according to data from CoinGecko. Ethereum is down 6.7% over the same period, trading at $1,756 having lost 34% over the past month.
Ethereum (ETH) gas consumption trends paint a picture of what sectors of the crypto market have been expanding, according to the analytics firm Glassnode. In a new analysis, Glassnode says non-fungible tokens (NFTs) now represent 30% of Ethereum’s gas consumption dominance, far outweighing decentralized finance (DeFi). “Through observation of Ethereum network usage, we can identify […]
The post Ethereum (ETH) Gas Consumption Trends Hint at Expansion of One Crypto Sector, According to Analytics Firm appeared first on The Daily Hodl.
A closely followed crypto strategist is unveiling his next price target for Bitcoin (BTC) that will massively defy BTC’s current downtrend. Pseudonymous analyst Credible tells his 332,300 Twitter followers that one day he will be bearish on Bitcoin, but not until it roars past the $100,000 level to complete an extended bull cycle. “Looking forward […]
The post Crypto Analyst Predicts ‘Brutal’ Bitcoin (BTC) Rally Catches Bears off Guard – Here’s His Target appeared first on The Daily Hodl.
Investors are urgently sending Bitcoin into exchanges in order to either de-risk their portfolio or to protect margin positions with more collateral according to Glassnode’s latest report.
The number of transactions on the Bitcoin network has spiked over the past week, which blockchain analysis firm Glassnode suggests are ‘urgent’ transactions due to investors de-risking.
A sudden influx of 42,800 transactions hit the mempool on Bitcoin (BTC) last week. Glassnode’s chief analyst says these were likely "urgent" transactions due to the high amount of fees paid per transaction. The average fee rose to $2.72 last week, about 15% higher than the typical average according to bitinfocharts, an on-chain data tracker. The findings were reported in the Glassnode “Week On-chain” report on May 9.
The #Bitcoin market saw and extremely volatile week, with prices trading down to $33.8k, and an additional 10% of the network falling into loss.
— glassnode (@glassnode) May 9, 2022
We analyse the market reaction across the mempool, exchanges, derivatives and stablecoin supply contractions.https://t.co/WDuzlObVxK
The mempool on a blockchain network is where transactions are sent before being confirmed in a block. The higher the fee paid on a transaction, the higher the likelihood it will be picked ahead of others.
Glassnode wrote that investors paid higher-than-average fees likely in order to prioritize their bids to de-risk their portfolio or add collateral to their margin positions as BTC price has fallen 19% over the past seven days. Just over 15% of fees paid for on-chain transactions correlated with exchange deposit rates, and these were only higher in May 2021 during another period of heavy sell-offs.
BTC inflows to exchanges outpaced inflows for most of 2022, however that changed last week as there was more than $50 million more worth of inflows than outflows. Glassnode said the total amount of exchange-related volume was only surpassed last October and November and matched the peak of the 2017 bull market in late December, and early January of 2018.
Glassnode also noted that BTC accumulation has been on a low trend since the middle of April. “Shrimps” who hold less than an entire Bitcoin were the largest accumulators of any cohort of wallets up to whales through the past week, but even their accumulative strength was weak compared to previous months this year.
Related: Bitcoin retests key $30K support zone as data highlights BTC whale accumulation
The largest distributors, or sellers, were those in the highest cohort who hold at least 10,000 coins. According to Glassnode, distribution has been higher than accumulation through most of 2022, however, the largest accumulators have been those holding less than one BTC up to those holding 10.
With total fees spent at a local high as investors urgently try to exit more volatile positions, it appears that Bitcoin markets may continue down their “rocky road” to capitulation, as Cointelegraph reported on May 10.
The Bitcoin market appears to be retracing the gains it has made since January as whales may be exiting and selling on centralized exchanges according to Glassnode.
The number of Bitcoin whales is rapidly decreasing to levels not seen since earlier this year, possibly due to the three-month high of coin inflows to centralized exchanges (CEXs).
Bitcoin (BTC) market tracker Glassnode has issued several bearish indicators for the largest cryptocurrency by market cap, including data suggesting a market exit for whales holding at least 1,000 coins, and exchange inflows of more than 1.7 million coins, the most since February.
#Bitcoin $BTC Exchange Inflow Volume (7d MA) just reached a 3-month high of 1,755.021 BTC
— glassnode alerts (@glassnodealerts) May 9, 2022
Previous 3-month high of 1,729.605 BTC was observed on 08 May 2022
View metric:https://t.co/1S6EbDkdOO pic.twitter.com/8kSJPOLJXW
High CEX inflows of BTC suggest whales are potentially exiting the market by selling coins, possibly as a way to prepare for a longer market downtrend. Cointelegraph reported on May 7 that recent sell-offs were likely executed by short-term holders who had accumulated coins in late January and early February when prices had reached a 6-month low of about $34,800.
Unfavorable outlooks on the market based on hard data have led the Bitcoin Fear and Greed Index to drop to 11, the “Extreme Fear” region. The index rates the general amount of fear or greed among Bitcoin investors.
Bitcoin Fear and Greed Index is 11 — Extreme Fear
— Bitcoin Fear and Greed Index (@BitcoinFear) May 9, 2022
Current price: $34,041 pic.twitter.com/PQK3x6YMok
Despite the poor sentiment, BTC daily transactions do not yet appear to have been negatively affected. According to on-chain data from YCharts, there were 233,892 daily transactions worth about $30 billion on May 8, which has been about the average since January.
Lead on-chain analyst at Glassnode “Checkmate” tweeted on Sunday “Many of you are waiting for the Bitcoin ‘capitulation wick’,” partially confirming the notion that investors expect BTC to continue to fall. A capitulation wick is usually characterized by a relatively long, sudden, and catastrophic drop in price, like the one witnessed on March 12, 2020, when BTC dropped 43% in a day to around $4,600.
Many of you are waiting for the #Bitcoin 'capitulation wick'.
— _Checkmate ⚡ (@_Checkmatey_) May 8, 2022
If it happens, and it really is THE capitulation wick, the majority of folks won't step in a buy it because the fear will be too great.
This is the way it always is, and always will be.
Tip: have a plan, stick to it
Related: Bitcoin price target now $29K, trader warns after Terra weathers $285M ‘FUD’ attack
Market analyst Caleb Franzen tweeted to his 11,000 followers on Sunday that investors should look for markets to continue trending downward based on his analysis suggesting we will remain “short-term bearish.” He concluded by stating that it “seems worthwhile to expect more pain.”
BTC is currently down 10.39% over the past seven days, trading at about $33,806 according to Cointelegraph data.
Macro headwinds continue to hamper Ethereum's long-term upside prospects.
Ethereum's native token Ether (ETH) is poised for a mini bull run above $3,000 primarily due to a classic bullish reversal pattern on its shorter-timeframe chart, and a huge spike in ETH outflows from Coinbase.
ETH's price has been forming a falling wedge pattern since late March 2022, which raises its prospects of undergoing a breakout move in May.
Falling wedges appear when the price trends lower inside a range defined by two descending, contracting trendlines.
As a rule of technical analysis, these wedges resolve after the price breaks out of their range to the upside and rises to a level at length equal to the maximum distance between the pattern's upper and lower trendline when measured from the breakout point.
The maximum falling wedge height is around $395. Suppose ETH's price closes above $2,850, the potential breakout point, accompanied by an increase in trading volume, its likelihood of rising by another $395 (toward $3,150) will be higher.
The interim upside outlook in the Ether market coincides with bullish on-chain data.
Notably, the number of ETH leaving Coinbase, the second-largest crypto exchange by volume, reached its highest level on May 3, data from CryptoQuant shows.
$ETH Coinbase Outflow hits an all-time-high
— CryptoQuant.com (@cryptoquant_com) May 4, 2022
Live Chart https://t.co/PiITw2ZFf3 pic.twitter.com/tlFQndUhvQ
Simultaneously, the ETH balance on all the crypto exchanges fell on May 3 to its lowest level since August 2018, according to one of Glassnode's on-chain metrics.
Both indicators imply a surge in traders' preference to hold Ethereum tokens over trading them for other assets.
They also coincide with a recent recovery in the upside sentiment of small Ether traders, namely an increase in the number of addresses that have a minimum balance of 0.1 ETH, 1 ETH and 10 ETH.
The Ethereum balances tick higher across the retail addresses as Ether's price trends lower, indicating that traders have been buying ETH at local lows. That further supports the falling wedge's bullish reversal setup.
Ether's likelihood of crossing the $3,000-level has not plucked it out of its prevailing, long-term bearish setup, however.
As Cointelegraph covered earlier, ETH risks breaking below its ascending triangle range in Q2/2022 with its downside target sitting anywhere between $1,820 and around $2,670, depending on the breakout point.
Additional downside cues come from macro fronts, with Ethereum — like its top rival Bitcoin (BTC) — still holding its positive correlation with U.S. stocks in a sign that it would tail the traditional markets downward due to a common factor: a hawkish Federal Reserve.
The U.S. central bank will release a policy statement on May 4 at 2 pm EST, followed by chairman Jerome Powell's press conference at 2:30 pm EST. Officials have signaled that they would increase benchmark rates by 0.5% and approve plans to unwind their $9-trillion asset portfolio.
Related: Smart money is accumulating ETH even as traders warn of a drop to $2.4K
Researchers from Strategas Research Partners and Morgan Stanley anticipate that the U.S. benchmark index, the S&P 500, will decline by another 15-16% into 2022, reports Bloomberg. As a result of its consistent positive correlation, ETH also faces similar downside prospects this year.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
BTC price continues to trade in a wide range, providing an opportunity for options traders to use the Iron Condor strategy.
The last time Bitcoin (BTC) traded above $50,000 was Dec. 27, 2021. Since then, four months have passed, but traders seem somewhat optimistic that inflation has hit the necessary threshold to trigger cryptocurrency adoption.
In theory, the 8.5% inflation in the United States means that every five years, the prices increase by 50%. This essentially turns $100 into $66 by slashing 33% of the dollar’s purchasing power.
The U.S. Federal Reserve FOMC meeting is expected to rule on the interest rates on May 4, but more importantly, the FED is expected to announce a program to offload part of its $9 trillion balance sheet. Thus, instead of supporting debt and mortgage markets, the U.S. Central Bank will likely sell $95 billion worth of these assets every month.
The consequences could be severe and risk markets have priced in such a scenario. For instance, the Rusell 2000 mid-capitalization stock market index is down 16.5% year-to-date in 2022. Similarly, as measured by the MSCI China index, the Chinese stock market is currently facing a 20% correction year-to-date.
There is no way to know what will trigger a Bitcoin bull run, but a report by Glassnode on April 18 has detected "a large amount of coin supply" accumulating between $38,000 and $45,000. For traders who believe BTC will reach $50,000 by July, there is a low-risk options strategy that can be used to cast a long bullish bet.
Following the whales and large investors usually pays off, but most traders are looking for ways to maximize gains while also limiting losses. For example, the skewed "iron condor" maximizes profits near $50,000 by July by limiting losses below $38,000.
The call option gives the buyer the right to acquire an asset at a fixed price in the future and the buyer pays an upfront fee known as a premium for this privilege.
On the other hand, the put option provides its buyer the privilege to sell an asset at a fixed price in the future — a downside protection strategy. Meanwhile, selling this instrument offers exposure to the price upside.
The iron condor consists in selling both the call and put options at the same expiry price and date. The above example has been set using the BTC July 29 options.
To initiate the trade, the investor needs to short 1 contract of the $44,000 call option and another 1.4 contracts of the $44,000 put option. Then, the buyer needs to repeat the procedure for the $50,000 options, using the same expiry month.
To protect from an eventual downside, one should buy 3.46 contracts of the $38,000 put option. Lastly, one should buy 1.3 contracts of the $70,000 call option to limit losses above the level.
This strategy yields a net gain if Bitcoin trades between $40,500, 4% above the current $38,900 price, and $60,500 on July 29. Net profits peak at 0.33 BTC at $50,000, but remain above 0.21 BTC between $43,200 and $53,400.
Meanwhile, the maximum loss is 0.21 BTC in either extreme if, on July 29, Bitcoin price trades below $38,000 or above $70,000, both of which seem rather unlikely.
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.
Bitcoin's correlation with stocks has risen to alarming levels, according to some market analysts.
Bitcoin (BTC) prices could drop by 20% in the next few months, but that has not deterred its richest investors from stacking.
The amount of Bitcoin held by "unique entities" with a balance of at least 1,000 BTC, or so-called "whales," has increased to its best levels since September 2021, data on Glassnode shows.
Interestingly, the number in the past week grew despite Bitcoin's price decline from $43,000 to around $38,000.
Marcus Sotiriou, an analyst at GlobalBlock, a U.K.-based digital asset broker, considered the latest spike in Bitcoin whale holdings as a bullish indicator, recalling a similar move in September 2021 that preceded a BTC price rally to $69,000 all-time highs in November 2021.
"As whales have a substantial impact on the market, this metric is an important one to take note of," he said.
Bitcoin's price has fallen from $69,000 in November last year to almost $40,000 in late April 2022, driven lower primarily due to Federal Reserve's decision to aggressively hike interest rates and unwind its quantitative easing program to tame inflation.
Interestingly, Bitcoin's fall has mirrored similar downside moves in the U.S. equity market, with its correlation with the tech-heavy Nasdaq Composite reaching 0.99 in mid-April. An efficiency reading of 1 shows that the two assets have been moving in perfect tandem.
"You should think about this high correlation as a gravitational field pulling on Bitcoin’s price," says Nick, analyst at data resource Ecoinometrics. He adds:
"If the Fed nukes the stock market into a black hole, don’t expect Bitcoin to escape a major crash."
Technicals agree with depressive fundamental indicators. Notably, Bitcoin has been breaking down from a "bear flag" pattern and risks undergoing further price declines in the coming months, as illustrated in the chart below.
The bear flag's downside target sits below $33,000.
Meanwhile, Brett Sifling, an investment advisor for Gerber Kawasaki Wealth & Investment Management, says that a break below $30,000 would open the door for a crash to as low as $20,000.
Sotiriou remains long-term bullish on Bitcoin, noting that the contraction in the U.S. gross domestic product (GDP) by 1.4% in Q1/2022 may prompt the Fed to become less hawkish to avoid a recession.
"As long as we see these macro headwinds persist, I think the correlation to the Nasdaq will continue," the analyst told Cointelegraph.
"However, the longer this consolidation continues, the bigger the expansion will be when the Fed reverses course from hawkish to dovish."
Meanwhile, Nick believes that Bitcoin will recover faster than U.S. equities after the next large market drop.
Related: BTC and ETH will break all-time highs in 2022 — Celsius CEO
The analyst explained by pitting the size and duration of BTC's drawdowns — a correction period between two consecutive all-time highs — against tech stocks, including Netflix, Meta, Apple and others.
Notably, Bitcoin recovered faster than the given U.S. equities every time.
Excerpts:
"Bitcoin doesn’t look much different than your typical stock investment. So don’t worry too much about volatility and focus instead on long-term growth potential. Those betting on asymmetric returns shall be rewarded in time."
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
A whale-sized mystery is brewing as more than half a billion dollars in Bitcoin (BTC) is bouncing around numerous crypto wallets in less than a day. The data-tracking bot WhaleAlert reports that exactly 14,712 BTC was sent 11 times between 12 different wallets in a 17-hour time frame. The only number that changed was the […]
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