Bitcoin Overcame Half of the Bear Market – Glassnode

Glassnode analysts came to the conclusion that Bitcoin, despite numerous macroeconomic and geopolitical problems, is highly likely to have passed the first half of the bear market.

Last week, the price of Bitcoin broke through the upper limit of the three-month range at $47,000. Sellers have not been able to adequately resist the active accumulation of BTC in the range of $35,000 to $42,000 and the lack of significant spending of Bitcoins purchased in the first quarter of 2021.

The number of Bitcoins “aged” over a year over the past eight months has grown by 9.4% to close to a record 62.9%, which indicates clear retention of their assets by these hodlers, despite two large-scale corrections in the BTC rate. According to analysts, the current rate of increase in the indicator is similar to the indicators during the market recovery in 2018-2019.

Analysts added that the process of bottom formation and investor capitulation in a bear market is often a long and painful process, so one should not rush and declare the end of the bear market.

Experts noted that it is also possible for hodlers to increase sales of part of their holdings, for example, as sales of Bitcoins held for more than a year, in the amount of up to 7,000 BTC-10,000 BTC in the last 30 days. It seems that the increase in demand was able to sufficiently absorb the supply of coins on the market put up for sale by hodlers in order to possibly reduce their risks in the future.

According to the HODL Waves indicator, the share of coins “aged” less than a month is 16.23%, which corresponds to the values ​​of the “distrust” period in 2012, 2016 and 2019-2020.

The breakdown of UTXO by price tiers by short-term and long-term investors shows that the latter bought a large share of coins at prices above $45,000 and did not liquidate positions due to the increase in unrealized loss. And speculators have amassed coins ranging from $38,000 to $45,000, which may not be in vain given the current uncertainty.

Experts warned that the end of bear markets in the past was preceded by episodes of large capitulations of investors. On the profit/loss distribution chart of coins sent to exchange wallets, there have been two similar episodes over the past 12 months, but on a small scale. With two drawdowns of 50% over the specified period, this may reflect increased investor confidence in Bitcoin.

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