Bitcoin is yet to form a “resilient bottom” says Glassnode

With the current market sentiments and bearish outlook of Bitcoin, Glassnode predicts that it still hasn't bottomed out.
Bitcoin is yet to form a resilient bottom says Glassnode

According to a new report released by Glassnode, Bitcoin investors might have to deal with more selling pressure as the market is yet to establish a “resilient bottom“. 

Bitcoin has lost over 70% of its value from the all-time high of around $68,000 in just six months and has recently consolidated in the $20,000 region. Still, a comparison with the previous bear market indicates a further dip. So while there are some bottom signals, the current market structure hasn’t priced in everything. 

During the 2018-19 bear market, Bitcoin formed a breakpoint base around the $6k range before falling 50% over the course of a month. The drawdown was around 85% from ATH

This time the breakpoint base was broken at around $29K before falling to $17.6k in just over two weeks. Overall, the drawdown extends to 75%, indicating a bottom might not be far away.

Furthermore, in the last bear phase, Glassnode observed traits of retribution of wealth – transfer of BTC from weak to strong hands – because of capitulation from retail investors and miners. 

“For a bear market to reach an ultimate floor, the share of coins held at a loss should transfer primarily to those who are the least sensitive to price, and with the highest conviction”

stated the report. 

Last time, at the bottom, long-term holders (LTH) held about 34% of the BTC supply in unrealized loss, while short-term holders (STH) accounted for 3-4%. Currently, LTHs hold about 28%, while STHs still have a high 16% in unrealized loss. 

STHs are still speculating on prices, even though they have less conviction on the asset’s long-term value

Glassnode believes Bitcoin requires further “downside risk to fully test investor resolve, and enable the market to establish a resilient bottom.”

You can read the complete report here

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