According to data analytics firm Glassnode, investors should expect another price drop for the king of cryptocurrencies. In fact, comparisons with the latest bear markets show that the bottom has probably not yet been touched.
Comparison with previous bear market
Bitcoin is currently in great decline. In fact, the price of the asset down to 72% of its ATH recently and is now trading around $ 20,000. However, a comparison with the previous bear market may indicate we do not have the bottom yet.
During the previous bear market, from December 2017 to March 2019, Bitcoin reached its breaking point around $ 6,000. He knew then 50% drop. in just 1 month. The breaking point of this market seems to have reached about $ 30,000 when price came on Bitcoin crash 40% in a fortnight. Bitcoin is not the only one suffering from difficult times since Ethereum is also suffering the blow.
In addition, the redistribution of wealth due to falling prices occurred during the 2018 bear market. The same can be seen in the current bear market as new buyers become active around the range of 20. $ 000 and to many long – term investors capitalize.
Long-term hodlers at a loss?
According to Glassnode, long – term holders are under pressure from the price Bitcoin fell below $ 30,000. The report measures profitability using expenses (discounted losses) and tokens held below cost (unrealized losses). The blockchain analysis firm reports that the Long Term Holder Spent Output Profit Ratio (SOPR) is 0.67. The average costs of long-term holders are the same 33% discounted lossand those who still incur an unrealized loss of about -14%.
Present short-term investors and troubled miners
Also according to Glassnode, during the previous downturns in the bear market, long-term holders tend to hold over 34% of Bitcoin supply, while short – term holders accounted for between 3% and 4% of the supply. Currently, short-term holders are in possession about 16% of Bitcoin supply, suggesting that there is still room for a period of maturation to test their faith. It also means that the bottom of the market is probably not a bear not done yet.
According to data from Glassnode, the capitalization of miners is also currently in operation. The next quarter may see a more surrender from them if the price continues to fall. Glassnode recalls the capitalization of miners in the bear market 2018-2019 lasted about four monthss, but the current one is only about a month.
The analysis company concluded that Bitcoin supply volume reached 44.7% losses, which is not as serious as in previous bear markets. So chances are The price of bitcoin continues to fall before establishing a sustainable foundation.
For more information on Bitcoin, find our latest article on macroeconomic conditions and their impact on Bitcoin here.