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

Disclaimer: The opinion expressed in this article is opinion only and should not be taken as financial advice. Coinmash has no involvement with any assets discussed and urges everyone to do their own research before making any financial decisions.

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

Disclaimer
All articles published on Coinmash are strictly for informational purposes only. Any action that is taken from reading content published on this website is done at your own risk. 

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James Satoshi
James Satoshi
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