Glassnode notes transitional phase from bear to bull market

In the Bitcoin market, a cyclical transition is under way, driven by a sharp shift in the balance of total profits and losses. Glassnode analysts say as much.

In this edition of the Week On-Chain, we shall explore spending activity across a wide cross section of the market in response to the recent price uptick. The goal is to identify emerging patterns behavioral patterns, to gauge shifting tides.

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— glassnode (@glassnode) February 6, 2023

“Taking past cycles as a guide, the road ahead remains difficult. … Historically they were characterised by a broad sideways trend, with local volatile moves, typically in both directions,” the analysts explained.

Structural changes in the market are evident when considering the proportion of realized profits and losses. For the first time since April 2022 (collapse of the Terra ecosystem) there is a shift in dominance from the latter to the former.

The same metric in terms of realized capitalization suggests that the process has not yet gained the momentum typical of a bull-market apex or at times of capitulations such as the Terra collapse and FTX.

The majority of coins in motion were purchased relatively close to the current spot price. They have not yet registered a large realized ‘load’.

Net Unrealized Profit/Loss indicator showed market value exceeding the average purchase price of the coins. In other words, the typical Bitcoin holder is again in the black.

Period of the loss-making of investments lasted 166 days. This is comparable to cycles of 2011-2012 (157 days) and 2018-2019 (134 days), but lags the events of 2015-2016 (301 days).

Индикатор SOPR применительно к краткосрочным инвесторам впервые с марта 2022 года закрепился в зоне выше ключевой отметки 1. Другими словами, это первый за последние месяцы всплеск фиксации большого объема монет, приобретенных по более низким ценам.

Общая метрика также превысила пограничный рубеж — ходлеры продолжают нести убытки после краха Terra, но их масштаб стал слабеть.

Метрика Realized Cap HODL Waves с фокусом на монеты с «возрастом» не старше трех месяцев показала рост «богатства», принадлежащего новым владельцам, за счет его перехода от старых. Глубина этого момента исторически беспрецедентна.

Индикатор Realized HODL Ratio подтверждает указанные выше наблюдения, демонстрируя как тенденцию, так и скорость смены благосостояния к недавним покупателям биткоина.

As of the start of the year, inflows to crypto investment products reached $230m.

Earlier, LookIntoBitcoin experts noted the Bitcoin move to the early stage of a bull market.