Report: On-Chain Indicators Fail to Confirm Market Bottom

Based on November’s on-chain metrics, there were signs of panic among investors and miner capitulation, and no confirmation that the crypto market had reached a bottom. This comes from analytical report ForkLog.

According to Glassnode analysts, November saw the fourth-largest capitulation of Bitcoin investors. The average seven-day realized loss reached $10.16 billion. This is four times higher than December 2018’s figure and 2.2 times the level seen in March 2020.

Against the backdrop of FTX collapse and the subsequent market contagion, there was the largest sell-off among Bitcoin miners in nearly seven years.

According to Charles Edwards of Capriole Investments, similarly scaled events occurred in 2011 and 2015. Back then, the price of digital gold fell to $2.1 and $290 respectively.

Edwards’s conclusion was corroborated by the Difficulty Ribbon indicator, which signalled a renewed period of miner capitulation (the blue line crossed the purple from above to below, with values returning to the new “yellow zone”).

Values of aSOPR fell to December 2018 levels. Such low readings point to mass selling at a loss and pessimism in the market.

Puell Multiple remained in the oversold range — just below 0.5. In December, analyst noted that in previous bear cycles the indicator fell to 0.3. In the current year, the metric has fallen only to 0.375, which suggests that a bottom still lies ahead.

In December, Glassnode analysts noted that the trajectory of realized losses had eased, and on-chain activity showed a positive shift.

Follow ForkLog’s Bitcoin news on our Telegram — cryptocurrency news, prices and analysis.