Glassnode, which provides onchain analysis of the cryptocurrency market, stated in its latest report that the market has entered a “deep bear” phase, but that extreme panic selling has not yet been seen.
According to the company, the current situation points more to a bubble bursting process.
According to Glassnode’s analysis shared on social media, on-chain signals observed in investor behavior during last year’s Halloween period pointed to a potential bear market. In the approximately 100 days following these signals, the Bitcoin price fell from $110,000 to $60,000, registering a drop of about 45%.
The Long-Term Investor Profit-Taking Pressure data included in the report reveals that long-term investors have taken approximately 318,000 BTC in additional profits since November 1st. This unusually large sell-off, occurring in weak market conditions, continues to put downward pressure on the price. However, the fact that long-term investors’ total assets have started to increase again since the beginning of December indicates a slowdown in the pace of selling.
According to the Market Loss Level metric, the loss ratio has reached approximately 24% at the $60,000 price level. This ratio is significantly above the bull-bear transition threshold. However, Glassnode points out that historically, extreme panic selling has often resulted in loss ratios exceeding 50%, indicating that the market has not yet reached “capitulation” levels at this stage. This suggests that the process is progressing as a gradual bubble burst rather than a sharp collapse.
On the other hand, it is noteworthy that since the peak seen in October, the price has failed to remain above the cost basis of the top 1%, 5%, 10%, and 20% investor groups. At the $60,000 level, the price is approximately 37% below the cost basis of the top 20% investor group, which is around $95,000. This indicates significant psychological pressure on investors who bought at high levels, and the market structure is said to be similar to the period in May 2022.
*This is not investment advice.