Bitcoin Market Mirrors Early 2022 Bear Market as On-Chain Stress Increases, Glassnode Reports
Glassnode's weekly newsletter highlights that Bitcoin's on-chain metrics currently resemble conditions observed at the start of the 2022 bear market. Key indicators include heightened stress among top buyers and an increase in the supply of Bitcoin held at a loss.
Off-chain metrics similarly show weakening demand and a decline in risk appetite. ETF flows have been decreasing steadily, with the IBIT ETF experiencing six consecutive weeks of outflows, amounting to over $2.7 billion in redemptions within five weeks. Spot market volumes have also deteriorated.
Since mid-November, Bitcoin's spot price has fallen below the 0.75 quantile, trading near $96,100. Consequently, more than 25% of the total bitcoin supply is underwater. The total supply in loss, calculated on a 7-day simple moving average, reached 7.1 million BTC, which aligns with the higher range of 5 to 7 million BTC noted in early 2022.
The realized capitalization net position change stands at approximately $8.69 billion per month, significantly lower than the summer peak of $64.3 billion per month. This signals weakening investor activity.
Derivative markets reflect reduced risk appetite as well, with open interest declining. Perpetual funding rates have been mostly neutral, punctuated by brief negative periods, and the funding premium has cooled down. Additionally, the cumulative volume delta has turned over, with Binance's cumulative volume delta remaining negative and the Coinbase premium poised to reverse after recently becoming positive.
