Bitcoin [BTC] proprietors should know that the bottom is …
A wise man once said, “To know your future, you must know your past.” By deciding on Bitcoin [BTC] has finally reached the bottom of the ongoing bear market, the chain analysis platform Glassnode, in a new reportanalyzed and compared the characteristics and duration of bear cycles in the past with the current one.
In its report entitled “Pressure Builds on Diamond Hands”, Glassnode tried to identify at which points in previous bear cycles the formation of Bitcoin bear market floors took place. According to the analysis platform, this period existed every time “forced sales pass, sales fatigue is reached and the downward pressure begins to subside.”
Redistribution of wealth
According to Glassnode, an important feature of a long-standing bear market is “the redistribution of wealth among the remaining stakeholders.” This essentially means that cryptocurrencies are increasingly changing hands among investors who remain in a long-term bear market.
In the BTC bear market from December 2017 to March 2019, Glassnode noted that after the price of BTC reached an all-time high (ATH) of $ 6,000, a huge redistribution followed after the price fell to $ 3,000 and $ 4,000.
By comparing this with the ongoing bear market, Glassnode pointed out that after the price of BTC fell to the $ 30,000 floor, redistribution patterns were observed. BTC coins that changed hands were then intensified since the price came down to the $ 20,000 region.
Source: Glassnode
Losses transferred to long-term owners?
Glassnode, in its report, further noted that key indicators of when a bottom has been formed in a bear market are when short-term owners leave the market and coins that they previously held at a loss, and the coins are then redistributed to “strong conviction units, which are relatively price insensitive (long-term owners). »
Glassnode noticed that the current bear market has not yet reached the bottom, stated,
“In the depths of previous bear markets, the share of the offer held by Long Term Holder (LTHs,) and with losses exceeded 34%. In the meantime, the share held by short-term holders (STHs) fell to only 3% to 4% of the offer. At present, STHs still have 16.2% of the supply in losses, which indicates that newly redistributed coins now have to go through the maturation process in the hands of holders of higher convictions. “
Source: Glassnode
Is miner capitulation at stake here?
With regard to implicit income stress (Puell Multiple) and observed hash rate decrease, Glassnode found that Miners’ capitulation risk is a factor that is usually a factor in determining bottoms in bear markets. That said, Glassnode concluded,
“The duration of the mining capitulation in the bear market 2018-2019 was around 4 months, and the current cycle only started 1 month ago. Miners currently have about 66.9,000 BTC collected in their treasuries, and thus the next quarter is likely to remain in jeopardy. for further distribution unless coin prices recover meaningfully.
Source: Glassnode
