The crypto economy has fallen below the $1 trillion mark to the $970 billion level as numerous digital currencies have lost more than half their U.S. dollar value since November 2021. Bitcoin is down 70% from last year’s all-time high, and a new report from Glassnode Insights calls the current bear market a “bear of historic proportions,” while “one could reasonably argue that 2022 is the most significant bear market in the history of digital assets.” (Emphasis added.)
Glasnode researcher: “Bitcoin is currently experiencing the largest capital outflow event in its history.”
Many people understand that the crypto economy is currently in a bear market, but no one knows where it will lead or when it will end. Bitcoin and the crypto economy in general are going through several bear markets, and a recent Glassnode Insights reportclaims it may just be the worst on record. Analysis firm Glassnode offers an analysis of thecurrent price decline in Bitcoin (BTC)and how digital assets are slipping below their 200-day moving average (DMA).The 40-week time span gives traders perspective on whether the current trend will continue to fall and it can also identify potential floor prices.
Glassnode’s postexplains the Mayer Multiple and 200 DMA and how they can signal a bear or bull market. Glassnode’s analysis points out that “when prices trade below the 200 DMA, it is often considered a bear market.” When prices trade above the 200 DMA, it is often considered a bull market.” In addition, Glassnode utilizes data such as “realized price,” “realized cap,” and “market value/realized value oscillator (MVRV ratio).”
“The 30-day position change in realized caps (Z-Score) allows us to see the relative monthly capital inflows/outflows intoassets; it provides a statistical basis for BTCassets,” explains Glassnode’s blog post. ‘By this measure, Bitcoin is currently experiencing the largest capital outflow event in its history, recording -2.73 standard deviations (SD) from the mean. This is one overall SD greater than the next largest event, which occurred at the end of the 2018 bear market and again at the March 2020 sell-off.”
Glassnode has been researching and discussing the current bear market for quite some time and released avideocalled “The Darkest Phase of the Bear” on June 13. The video examines whether it is time for the final phase or the final capitol in the bitcoin price cycle. Historically,BTChas been over 80% lower in all of its major bear markets, with an 80% drop in price from $69K to $13,800 per unit. Some crypto investors believe the end of the bears may be near, while others believe the greatest pain is yet to come. The greatest pain, the depth of despair, the lowest lows, or the bottom may not be there yet.
Glasnode’s report details the growing impact of bitcoin because it has become so large. The Glassnode research report states, “As the bitcoin market matures over time, the magnitude of potential US dollar denominated losses (or gains) will naturally increase as the network grows.” But even on a relative basis, this does not minimize the severity of this $4+ billion net loss.” Glasnode Researcher writes, “Ethereum prices have spent 37.5% of its trading life in a similar regime under realized prices, which is remarkable compared to Bitcoin at 13.9%.” This is likely a reflection of‘s historical outperformance. This seems to be a reflection of the historical outperformance of BTCduring the bear market as investors pull their capital higher above the risk curve, leading to longer durationETHtrading periods below investors’ cost basis.”
Glass node added:
MVRV’s current cycle low is 0.60 and has only been lower for the past 277 days, representing 11% of its trading history.
Last week,BTCandETHprices rose in value after being hit hard the week before and remained consolidated for most of the week. BTCprices are still down 8.1% over the past two weeks, while the USD value of the crypto asset is down 0.3% over the past 24 hours. ETHvalue has slid 0.1% over the past 24 hours toin the 2-week stats; ETHis down just 1.3% against the USD; Glassnode’s posting shows that the data and research done is the most important crypto bear market in history It points to one of the most important crypto bear markets in history.
The Glassnode Insights report concludes.
The various studies mentioned above highlight the magnitude of investor losses, the scale of capital destruction, and the observable capitulation events that have occurred in recent months. Given the duration and magnitude of this bear market, one can reasonably argue that 2022 is the most significant bear market in the history of digital assets.
Image credit: Shutterstock, Pixabay, Wiki Commons