Glassnode Highlights Divergence Between Bitcoin and Altcoin Cycles

Despite Bitcoin’s sharp correction at the start of last week, bulls generally maintain control. For altcoins, the price plunge likely marked a bear market event, according to Glassnode experts.

The digital asset market has encountered tumultuous waters in recent weeks, with investors experiencing sharp price falls, and locking in substantial losses.

The Altcoin space was the worst hit, with a significant decline in valuations. In this report, we analyze the severity… pic.twitter.com/CLC9vLShKr

— glassnode (@glassnode) February 11, 2025

The drop on February 3 to around $93,000 for digital gold was generally consistent with dips before consolidation in the current cycle. This is indicated by smoothing indicators that account for the growing scale of the asset market, analysts noted.

Amid heightened volatility, Bitcoin began and ended the week at roughly the same level — $98,000.

Meanwhile, short-term holders (STH) recorded losses of ~$520 million during the plunge — one of the largest figures in the current bull cycle. Long-term holders (LTH) typically start incurring losses during a bear market.

The breakdown of STH losses by deposit “age” is as follows:

• up to one day — $68.5 million;
• up to one week — $256.3 million;
• up to one month — $479.1 million;
• up to three months — $14.5 million;
• up to six months — $112 million.

“This confirms the idea that a large portion of trading volume on the network and realized losses are often associated with investors who have recently entered the market and are therefore most sensitive to volatility and price fluctuations,” stated Glassnode.

Analysts used the MVRV metric for a one-year moving window to assess critical support areas. Bitcoin’s price confidently holds positions in the middle of the range ($80,100-$118,000) and has only tested the upper boundary in recent weeks.

For short-term investors, a similar baseline cost corridor based on MVRV is limited to $71,000 and $131,000.

“Currently, the spot rate is between the upper and lower bands. This suggests that bulls are in control, but the price is approaching their first lines of defense and almost tested the baseline cost for STH during the recent sell-off,” experts acknowledged.

Analysts also noted changes in the composition of Bitcoin investors related to the influx of large capital. In their assessment, “the presence of more resilient and patient holders” contributes to price stability.

The altcoin sector experienced “significant pressure from sellers” during the recent market sell-off, Glassnode emphasized.

Over the past two weeks, altcoin capitalization has decreased by $234 billion. The dip was deeper at the moment, although it was less severe than the declines in May 2021 (miners’ migration from China) and May 2022 (LUNA/UST collapse).

“The severity of this decline underscores the scale of capitulation and can reasonably be considered a bear market event in the altcoin sector. This is quite interesting, as Bitcoin does not appear to show the same relative weakness, indicating a divergence between BTC and the rest of the digital asset landscape,” stated Glassnode specialists.

Earlier, crypto trader Matthew Hyland, on the contrary, saw signs of a bottom in the altcoin segment.