Cryptocurrencies have already fallen sharply in this bear market. The fall of Terra (LUNA), Celsius, FTX and the sharply higher interest rates have caused a lot of volatility. mWho says it’s already over? On-chain data from Glassnode suggests that bitcoin (BTC) has had the bottom, or that we are getting very close.
Bitcoin data indicates bottom
The company writes this in a weekly research report. All inflows since May of 2021 are now gone, causing the price to ‘reset’ to a healthier level. An excessive amount of debt has now disappeared from the market. May 2021 was an important peak, after which major investors started slowly selling their BTC, according to Glassnode.
In the wake of one of the largest deleveraging events in digital asset history, the #Bitcoin Realized Cap has declined such that all capital inflows since May 2021 have now been flushed out, signaling a capital reset is underway.
Read more here 👇https://t.co/HUcrlLH7YB
— glassnode (@glassnode) December 5, 2022
Both the June crash last June and the FTX crash were investor capitulations on a historic scale. The FTX crash resulted in a record single-day loss of $4.435 billion. Still, the losses from the FTX crash are less significant. In fact, according to the on-chain researchers, you could see it as a ‘divergence‘. The price fell just like in June, but the losses are less than then.
Enormal cryptolose this year
Nevertheless, the impact of the past year should not be dismissed. The Realized Profit/Loss Ratio indicates that investors’ losses were 14 times greater than when they took their profits. This indicator is now at a point not seen since the absolute bottom in 2019. Whenever this point is reached, the market finds a significant bottom.
The market is now worth just under $800 million. At the top, the market had according CoinGecko a total value of almost 3 trillion, a drop of more than 70%. In any case, the first signs of a bottom are there according to Glassnode.