Several elements have contributed to creating the present crypto bear market the worst ever recorded as most Bitcoin (BTC) merchants are underwater and proceed to promote at a loss, based on Glassnode.
Blockchain evaluation agency Glassnode’s Saturday report titled “A Bear of Historic Proportions” outlines how Bitcoin’s present dip under the 200-day transferring common (MA), destructive deviation from realized value and internet realized losses have conspired to make 2022 the worst in Bitcoin’s historical past:
“In the midst of this, Bitcoin and Ethereum have both traded below their previous cycle ATHs which is a first in history.”
The first and most evident indication of a bear market is when the spot value of Bitcoin (BTC) falls under the 200-day MA and an much more excessive state of affairs, the 200-week MA. To spotlight how uncommon the present value ranges are, Glassnode confirmed that in the 2022 bear market, Bitcoin has fallen under half the 200-day MA stage.
Bitcoin value has fallen under 0.5 MM for the first time since 2015: Glassnode
Glassnode additionally demonstrated that falling under 0.5 the Mayer Multiple (MM) is an exceedingly uncommon event that hasn’t occurred since 2015. The MM elements in value modifications above and under the 200-day MA to indicate overbought or oversold circumstances. The report states, “Only 84 out of 4160 trading days (2%) have recorded a closing MM value below 0.5:”
“For the first time in history, the 2021-22 cycle has recorded a lower MM value (0.487) than the previous cycle’s low (0.511).”
Confirming the severity of present market circumstances is the spot value falling under the realized value, which has pressured merchants to more and more promote their cash at a loss. Glassnode famous that such a cascade impact is “typical of bear markets and market capitulations.”
Glassnode stated cases when spot costs commerce under the realized value are unusual, noting that that is solely the third time this has occurred in the final six years and the fifth time it’s occurred since Bitcoin’s launch in 2009:
“Spot prices are currently trading at an 11.3% discount to the realized price, signifying that the average market participant is now underwater on their position.”
The rarity of this occasion is illustrated by Glassnode’s mannequin exhibiting that simply 13.9% of all Bitcoin buying and selling days have seen spot costs dip under realized costs.
Just 13.9% of buying and selling days have seen spot costs under realized value: Glassnode
These circumstances are exacerbated by buyers locking of their losses on the largest crypto by market cap. When Bitcoin fell under the $20,000 mark in June 2022, Glassnode wrote that BTC buyers locked in “the largest daily USD denominated realized loss in history:”
“Investors collectively locked in a loss of -$4.234B in a single day, which is a 22.5% increase from the previous record of $3.457B set in mid-2021.”
Factoring in all the destructive metrics, Glassnode assesses that the market is in the midst of a capitulation occasion. Cointelegraph corroborated this evaluation on Friday by mentioning that miners have began promoting their stacks, which is one other indicator that capitulation has taken place. Such occasions usually signify the backside value vary of a cycle.
Related: 5 indicators merchants can use to know when a crypto bear market is ending
BTC is at present down 70% from its November 2021 excessive, buying and selling at $21,207, based on CoinGecko.