Bitcoin has yet to see this historic late bearish crossover
Data from Glassnode shows that Bitcoin has yet to see a crossover in the current cycle that has historically marked late bear periods.
The realized rate for the Bitcoin short-term holder is still above that of the long-term holder
According to the latest weekly report from Glassnode, STH and LTH realized price crossovers have not yet taken place during the current bear market.
The “realized price” is a calculation that indicates the cost basis of the average owner in the Bitcoin market. The value is calculated by dividing the realized peak by the total number of coins in circulation.
When the regular price of BTC moves below the value of this indicator, the average investor enters a state of loss.
This cost base can naturally also be calculated specifically for different holder groups. The cohorts in question here are the “long-term holders” and the “short-term holders”; here is a chart showing the trend in realized prices for these two groups over the last few years:
The values of the two metrics seem to be approaching each other | Source: Glassnode's The Week Onchain - Week 37, 2022
Long-term holders (LTHs) include all those Bitcoin investors who have held onto their coins since at least 155 days ago, while short-term holders (STHs) are those who have held their coins quietly for less than that.
As you can see in the graph above, the realized prices (RPs) of these two cohorts observed crossovers during the last two bear markets.
In these cycles, the LTH RP crossed over the STH RP as the late bear began. The implication of such a crossover is that coins bought recently (within the last 155 days) are now more profitable than those bought a long time ago. This shows that the market has gone through a deep capitulation event.
However, during the current bear market, the crypto has yet to see any such crossover, even after observing 10 months of decline.
The post-crossover Bear period lasted 339 days in 2014-15, while it was 145 days for 2018-19. This suggests that the current bear will still have some time to go before a bull market can start, since the crossover hasn’t even happened yet.
The report notes that as the two metrics converge, this crossover is likely to take place this month.
BTC price
At the time of writing, Bitcoin’s price is hovering around $22.5k, up 13% in the last week. Over the past month, the crypto has lost 7% in value.
Looks like the value of the crypto has been going up during the last few days | Source: BTCUSD on TradingView
Featured image from Hans-Jurgen Mager on Unsplash.com, charts from TradingView.com, Glassnode.com
