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Glassnode analysts report bitcoin price bearish trend

Glassnode analysts report bitcoin price bearish trend

The record price drawdown since July 2021, significant realized losses by short-term investors, and the steadfastness of hodlers all point to a bitcoin bearish trend. These are the conclusions reached at Glassnode.

The #Bitcoin bulls have been put firmly on the back-foot, with prices cut in half since the Nov ATH. In our latest analysis we seek to define whether #Bitcoin has entered a prolonged bear, using investor psychology, behavior, and network profitability.https://t.co/4N1FKeHZHM & ; glassnode (@glassnode) January 24, 2022

As of this writing, the pullback in bitcoin quotes from ATH has almost reached 50%. After the 2018-2020 bear market, the current decline was the second deepest since July 2021, when the figure was 54%.

By comparison, corrections in the 2017 and 2020-2021 bull cycles did not exceed 20-40%. Analysts allowed that such a disposition could change investors' perception of the current market situation at the macro level.

Data: Glassnode.

Investors' capitulation contributed to the continuation of the downward dynamics. Last week, Net Realized Profit/Loss amounted to $2.5 billion. In other words, the market was dominated by liquidation of positions with losses relative to the prices of previous onchain transactions.

The lion's share of this value came from short-term investors who made their last transactions more than 155 days ago.

Data: Glassnode.

The Short Term Holder SOPR for short-term investors collapsed after testing resistance at 1. Such dynamics speaks to the desire of this group of players to "get their money back at any price." Lower values indicate an increase in their relative losses.

Data: Glassnode.

According to estimates, short-term holders account for 18.3% of the total supply of BTC (excluding coins stored on the exchange). Almost all of them are "unprofitable" for holders.

"This creates a psychological barrier, which further increases the chances of selling." analysts stressed.

Data: Glassnode.

The relative share of coins owned by short-term investors is close to multi-year lows. The correction did not affect the Hodlers - they increased to 81.7% of the total supply, despite the fact that 6.04% of their BTC holdings became unprofitable.

Data: Glassnode.

"Age" analysis showed that 59.3% of BTCs last moved online more than a year ago. These are coins that investors acquired early in the bull cycle (between October 2020 and January 2021) or before that. Over the past three months, the figure has grown by 5.8%. Experts reminded us that this behavior is typical of bear markets.

Data: Glassnode.

Analysts also looked at the difference between unrealized profits and losses based on the last coin move (Net Unrealized Profit/Loss, NUPL). It was 0.325, which means about 32.5% of coins are in unrealized profits. This contrasts with the March value of 0.75 or 0.68 last October.

"Given previous cycles, this low profitability is typical of the early and middle phase of a bear market (highlighted in orange). Unlike the bull markets of 2013 and 2017, NUPL declined between the tops of March-April and October-November. The reason is the distribution of coins at the highs. This has led to higher overall market values and bearish divergence." Experts concluded.

Data: Glassnode.

Recall, UBS analysts warned of the risks of the onset of "apocalyptic cryptozyma."

Earlier, investment firm Invesco allowed bitcoin to fall below $30,000 in 2022 as "the asset bubble deflates."

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