{"id":17820,"date":"2024-10-16T15:29:06","date_gmt":"2024-10-16T12:29:06","guid":{"rendered":"https:\/\/forklog.com\/en\/glassnode-highlights-bitcoins-volatility-risks\/"},"modified":"2024-10-16T15:29:06","modified_gmt":"2024-10-16T12:29:06","slug":"glassnode-highlights-bitcoins-volatility-risks","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/glassnode-highlights-bitcoins-volatility-risks\/","title":{"rendered":"Glassnode Highlights Bitcoin&#8217;s Volatility Risks"},"content":{"rendered":"<p>Following Bitcoin&#8217;s <span data-descr=\"all-time high\" class=\"old_tooltip\">ATH<\/span>, a divergence between demand and &#8220;active supply&#8221; has intensified, historically signalling a period of heightened volatility, according to Glassnode.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">A notable divergence between supply and demand is emerging, with the <a href=\"https:\/\/twitter.com\/hashtag\/Bitcoin?src=hash&#038;ref_src=twsrc%5Etfw\">#Bitcoin<\/a> market being range-bound for over seven months. <\/p>\n<p>With low volumes across on-chain and futures markets and a HODLer-dominated environment, the scene is set for heightened volatility in the near future.\u2026 <a href=\"https:\/\/t.co\/C83NCo6ugl\">pic.twitter.com\/C83NCo6ugl<\/a><\/p>\n<p>\u2014 glassnode (@glassnode) <a href=\"https:\/\/twitter.com\/glassnode\/status\/1846202231961555097?ref_src=twsrc%5Etfw\">October 15, 2024<\/a><\/p><\/blockquote>\n<p> <script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>The scenario is exacerbated by the market&#8217;s sideways movement over seven months, low on-chain and derivatives market volumes, and a predominance of HODLing among investors.<\/p>\n<p>Using the realised profit\/loss metric, analysts showed a reduction in daily capital inflow from $2.97 billion in March to $0.73 billion.<\/p>\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" src=\"https:\/\/forklog.com\/wp-content\/uploads\/1-1260.webp\" alt=\"1-1260\" class=\"wp-image-243316\"\/><figcaption class=\"wp-element-caption\">Data: Glassnode.<\/figcaption><\/figure>\n<p>The conclusions are supported by the Binary CDD metric, which tracks &#8220;holding time&#8221; spent in the market when holders of older supply engage in large transactions (balanced by the emergence of &#8220;new buyers&#8221;).<\/p>\n<p>Experts recorded a moderate &#8220;decay&#8221; of the indicator, indicating relatively low HODLer activity within the current price range.<\/p>\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" src=\"https:\/\/forklog.com\/wp-content\/uploads\/2-916.webp\" alt=\"2-916\" class=\"wp-image-243317\"\/><figcaption class=\"wp-element-caption\">Data: Glassnode.<\/figcaption><\/figure>\n<p>After analysing demand, specialists examined supply dynamics. The latter refers to the volume of coins that market participants are willing to spend and trade.<\/p>\n<p>The chart below presents several &#8220;available supply&#8221; options, including short-term holder and exchange balances (highlighted in red), as well as highly liquid bitcoins (in orange).<\/p>\n<p>Experts compared these metrics with &#8220;long-term held supply&#8221; indicators, which include coins in storage (in blue) and in HODLer wallets (in green).<\/p>\n<p>The illustration shows the strengthening of the latter group at the expense of the former.<\/p>\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" src=\"https:\/\/forklog.com\/wp-content\/uploads\/3-515.webp\" alt=\"3-515\" class=\"wp-image-243318\"\/><figcaption class=\"wp-element-caption\">Data: Glassnode.<\/figcaption><\/figure>\n<p>In the next stage, analysts considered the so-called &#8220;warm supply&#8221; \u2014 bitcoins moved within the last month for potential sale (highlighted in maroon). This category also includes coins forming trading volume (in red) and open interest (in purple) in futures.<\/p>\n<p>Experts noted that these indicators have effectively halved since reaching ATH. In other words, there is a clear reduction in speculation and market participant engagement.<\/p>\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" src=\"https:\/\/forklog.com\/wp-content\/uploads\/4-328.webp\" alt=\"4-328\" class=\"wp-image-243319\"\/><figcaption class=\"wp-element-caption\">Data: Glassnode.<\/figcaption><\/figure>\n<p>Glassnode then analysed the &#8220;wealth&#8221; share of two holder groups:<\/p>\n<ul class=\"wp-block-list\">\n<li>Short-term indicator [<1 month] \u2014 largely corresponds to demand from \"new investors\" bringing in \"fresh\" capital.<\/li>\n<li>Long-term indicator [1-2 years] \u2014 part of the supply from long-term and price-sensitive participants who accumulated capital during the bear market and held it throughout. The indicator peaks during the cycle&#8217;s bottoming phase.<\/li>\n<\/ul>\n<p>Specialists noted a high but declining presence of new demand. This significantly exceeds levels during the 2022 bear market but falls short of March figures.<\/p>\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" src=\"https:\/\/forklog.com\/wp-content\/uploads\/5-208.webp\" alt=\"5-208\" class=\"wp-image-243320\"\/><figcaption class=\"wp-element-caption\">Data: Glassnode.<\/figcaption><\/figure>\n<p>The confidence of &#8220;new investors&#8221; in the market&#8217;s direction remains within a neutral range \u2014 expenses do not differ significantly from the initial purchase price. Despite recent turbulence, the metric is noticeably higher than in 2019\u20132021, specialists explained.<\/p>\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" src=\"https:\/\/forklog.com\/wp-content\/uploads\/6-152.webp\" alt=\"6-152\" class=\"wp-image-243321\"\/><figcaption class=\"wp-element-caption\">Data: Glassnode.<\/figcaption><\/figure>\n<p>The absence of unrealised losses among &#8220;new investors&#8221; reinforces this resilience and indicates a lack of sharp declines in their profitability. In other words, this category experiences limited financial pressure and fear, reducing the likelihood of a deep bear market.<\/p>\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" src=\"https:\/\/forklog.com\/wp-content\/uploads\/7-95.webp\" alt=\"7-95\" class=\"wp-image-243322\"\/><figcaption class=\"wp-element-caption\">Data: Glassnode.<\/figcaption><\/figure>\n<p>Previously, Glassnode warned of digital assets&#8217; susceptibility to heightened volatility due to liquidation risks and an ambiguous macroeconomic outlook.<\/p>\n<p>Earlier, JPMorgan identified drivers for cryptocurrency growth by the year&#8217;s end.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Following Bitcoin&#8217;s ATH, a divergence between demand and &#8220;active supply&#8221; has intensified, historically signalling a period of heightened volatility, according to Glassnode. A notable divergence between supply and demand is emerging, with the #Bitcoin market being range-bound for over seven months. With low volumes across on-chain and futures markets and a HODLer-dominated environment, the scene [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":17819,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"","news_style_id":"","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[1273,1145,1150],"class_list":["post-17820","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-glassnode","tag-market-analysis","tag-news-plus"],"aioseo_notices":[],"amp_enabled":true,"views":"32","promo_type":"","layout_type":"","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/17820","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/comments?post=17820"}],"version-history":[{"count":0,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/17820\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media\/17819"}],"wp:attachment":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media?parent=17820"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/categories?post=17820"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/tags?post=17820"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}