Key Insights
- Glassnode released its “week-on-chain” report this week.
- Bitcoin’s recent behavior is similar to how it behaved in the past when its previous bear markets started to approach their ends.
- Data shows that selling activity on Bitcoin points to the formation of a “macro price bottom.”
Are Bitcoin sellers tired? The crypto analytics provider, Glassnode, released its “week-on-chain” report this week.
In this report, Glassnode drew some interesting comparisons between the “cycle bottom” of the current crypto winter the world is experiencing and the previous ones.
Glassnode, in its report, suggested that although Bitcoin (BTC) sellers may not have lost that much strength, the recent behavior of the crypto market is similar to how it behaved in the past when its previous bear markets were starting to approach their ends.
Data from the on-chain analytics company’s report also shows that selling activity on Bitcoin points to the formation of a “macro price bottom.”
Seller Exhaustion May Be Close
The bullish momentum of last week’s flash pump appears to have waned after Bitcoin formed a double-top rejection. The bears now appear to have begun wrestling control of the market out of the hands of the bulls.
In the report attached to a Glassnode tweet this week, the platform stated that the market was “hammering out a near-textbook bear market floor” and may have certain “risks” on the road ahead.
#Bitcoin has rallied back above the key $20k psychological level after many months of low volatility.
In this edition, we analyze how Bitcoin may be hammering out a near-textbook bear market floor and what risks may lay on the road ahead.
Read it here 👇https://t.co/WrsifLhxHC
— glassnode (@glassnode) October 31, 2022
The report also states that similar to prior cycles, investors and other crypto buyers have suffered significant financial losses due to the bear market on Bitcoin (and the rest of the market).
It said that the only thing left in the current market is time and investor indifference.
According to Glassnode, the Bitcoin network is battling low volatility and substantial on-chain losses.
The analytics platform refers to these volatility and on-chain woes as the elements of a “perfect storm” because, as a result, the Bitcoin Seller Exhaustion Constant is also at long-term lows.
As a side note, this Seller Exhaustion Constant is determined by its one-month rolling volatility and on-chain transaction profitability.
Glassnode notes that since these Seller Exhaustion Constant lows have only happened about seven times in the past, such lows are uncommon. And of the seven prior occurrences, Bitcoin shot up in price six times.
This would suggest that Bitcoin may soon reverse its negative trend.
Is Bitcoin at (Or Near) Its Bottom?
Realized price is the average buy price per coin of a certain asset.
According to Glassnode, an asset may be considered an “unrealized loss” when its spot prices move below its realized price.
This has been the situation for Bitcoin over most of the last four months.
According to the charting and market-data collection platform Woo Charts, the realized price for Bitcoin is higher than $21,000, while its spot price (or what it is worth now) is about $1000 lesser, at $20,146.
Glassnode also cites the Mayer-Multiple metric to drive their point home.
While the calculation method of this metric would be unnecessary to explain here, it is worth remembering that a Mayer metric value that is less than 0.6 (where Bitcoin currently is) indicates a severely oversold market.
Notably, market conditions like these happened in the 2014-2015 and the 2018-2019 bear markets, except that this current bear market’s conditions have held for much longer.
From this, it is safe to assume that Bitcoin is severely oversold and is either at or near its bottom.
Disclaimer: Voice of crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.
