Posted on

Silent Bitcoin Storm: Glassnode Uncovers What Lies Beneath The Surface

In the dynamic realm of Bitcoin, the ability to discern patterns and trends from raw data is invaluable. Glassnode’s latest report, “Exhaustion and Apathy,” serves as a beacon, illuminating the intricate nuances of the current state of the market. Let’s delve deeper into the numbers and their implications.

Historic Lows In Bitcoin Volatility

The overarching theme of Glassnode’s findings is the unprecedented stagnation in Bitcoin’s volatility. The data reveals that the digital asset has been trading within a remarkably narrow $29,000 to $30,000 range. Historically, Bitcoin has been synonymous with volatility, making this current phase an anomaly.

The report underscores this by highlighting the Bollinger Bands’ tightness, noting, “The upper and lower Bollinger Bands are currently separated by just 2.9%.” Such constricted movement has been a rarity in Bitcoin’s tumultuous history.

Meanwhile, the dynamics between short-term holders (STH) and long-term holders (LTH) offer a captivating narrative. Glassnode’s data indicates a significant shift in wealth between these two cohorts. The STH’s wealth has burgeoned by +$22B this year, while the LTH has witnessed a near-identical reduction of -$21B. This shift is not merely about numbers but also about market sentiment and strategy.

Bitcoin Long-/Short Term Realized Cap

The cost basis further elucidates this dynamic. The STH cost basis has surged by +59% YTD, settling at $28.6k. In stark contrast, the LTH cost basis lingers considerably lower, around $20.3k. This divergence suggests that recent market entrants might be paying a premium, potentially due to FOMO (Fear of Missing Out) or speculative behavior.

Glassnode’s exploration into spending patterns in this low volatility environment is also particularly enlightening. The data suggests that in such periods, the majority of coins moved on-chain have a cost basis that hews closely to the spot rate, resulting in minuscule realized profits or losses.

The Sell-Side Risk Ratio, a pivotal metric in this context, is languishing at an all-time low. To put it in perspective, fewer than 27 trading days (0.57%) have recorded a value lower than the current one, signaling a market teetering on the edge of a potential volatility resurgence.

Bitcoin STH Sell Side Risk Ratio

Segmented View Of BTC’s Supply

The report’s segmented analysis of Bitcoin’s supply, based on ‘investor holding time,’ offers a layered understanding of market behavior. The ‘Hot Supply,’ representing the most active coins, constitutes a mere 2.8% of all invested value in BTC. This suggests a market dominated by holders rather than traders.

The ‘Warm Supply,’ spanning from a week to six months, has seen a modest uptick year-to-date, now accounting for around 30% of Bitcoin’s wealth. This segment’s behavior is crucial as it often acts as a bridge between short-term reactions and long-term convictions.

The ‘Single-Cycle Long-Term Holders,’ those entrenched in the 2020-23 cycle, are the behemoths, holding a staggering 63% of the invested capital. Their cost basis, as per Glassnode, stands at $33.8k, indicating an average unrealized loss of -13.3%.

Single Cycle HODLers Supply Cost Basis

In juxtaposition, the classic LTH cohort, which includes the long-dormant and deep HODLed supply, boasts a cost basis of $20.4k, translating to an unrealized profit of +43.6%. This stark contrast underscores the lingering impact of the 2022 bear market and the cautious optimism of early adopters.

In conclusion, Glassnode’s data-driven insights paint a nuanced picture of the Bitcoin market. The dominance of long-term holders, the historic lows in volatility, and the evident investor apathy all converge to suggest a market in a state of stasis. The numbers indicate a market that’s waiting, perhaps for a Goldman Foresees Q2 2024 Fed Rate Cut: A Boost For Bitcoin? or a significant event, to determine its next direction.

At press time, Bitcoin was trading just above the 50-day EMA.

Bitcoin price

Posted on

Glassnode Suggests Bitcoin Long-Term Holder Conviction Not Lost Yet

Data from Glassnode suggests Bitcoin long-term holder capitulation hasn’t reached a scale that would imply a widespread loss of conviction yet.

Bitcoin Long-Term Holder Supply Has Declined By 61.5k BTC Since 6 Nov

According to the latest weekly report from Glassnode, the BTC long-term holder supply has observed a notable decrease recently.

The “long-term holders” (LTHs) make up a cohort that includes all Bitcoin investors who have been holding onto their coins since at least 155 days ago.

Holders belonging to this group are statistically the least likely to sell at any point, so movements from them can have noticeable implications for the market.

The “long-term holder supply” is an indicator that measures the total number of coins currently stored in the wallets of these resolute investors.

Changes in the value of this metric can tell us whether the LTHs are accumulating or selling at the moment.

Now, here is a chart that shows the trend in the Bitcoin LTH supply over the last few years:

Bitcoin Long-Term Holder Supply

Looks like the value of the metric has decreased in the last few days | Source: Glassnode’s The Week Onchain – Week 46, 2022

As you can see in the above graph, the Bitcoin LTH supply had been riding a constant uptrend for many months before last week, and set new all-time highs.

This means that the market had been continuously accumulating the crypto as the bear market went on.

However, since the 6th of November (when the crash triggered by the FTX collapse began), the indicator has sharply declined, suggesting that LTHs have participated in some selling.

In total, the decline has amounted to around 61.5k BTC exiting the wallets of the LTHs in this period so far.

The chart also includes the data for the 7-day changes in this Bitcoin indicator, and it seems like the metric has a negative value of 48.1k right now.

This value isn’t negligible, but as is apparent from the graph, this red spike isn’t on the level of the ones observed during the previous selloffs.

The report notes that this could imply there hasn’t been a widespread loss of conviction among Bitcoin’s most resolute holders yet.

Nonetheless, it remains to be seen where the metric goes from here. “Should this develop into a sustained LTH-supply decline however, it may suggest otherwise,” cautions Glassnode.

BTC Price

At the time of writing, Bitcoin’s price floats around $16.8k, down 15% in the last week. Over the last month, the crypto has lost 13% in value.

Bitcoin Price Chart

The value of the crypto seems to still be trading sideways | Source: BTCUSD on TradingView
Featured image from Daniel Dan on Unsplash.com, charts from TradingView.com, Glassnode.com

Posted on

Bitcoin 30-Day Long-Term Holder SOPR Is Yet To Hit Bottom Values

On-chain data shows the Bitcoin 30-day long-term holder SOPR hasn’t yet reached the historical bottom level during the current cycle.

Bitcoin 30-Day Long-Term Holder SOPR Has Declined Recently

As pointed out by an analyst in a CryptoQuant post, the long-term holders haven’t attained their maximum pressure point yet.

The “Spent Output Profit Ratio” (or SOPR in short) is an indicator tells us whether the average Bitcoin investor is selling at a profit or at a loss right now.

When the value of this metric is less than 1, it means the overall market is realizing some amount of profit currently.

On the other hand, the indicator having values than the threshold suggests that investors as a whole are moving coins at a loss at the moment.

“Long-term holders” (LTHs) are a cohort of Bitcoin investors who hold their coins for at least 155 days before selling or moving them.

Here is a chart that shows the trend in the 30-day moving average BTC SOPR over the last several years specifically for these LTHs:

The 30-day MA value of the metric seems to have been going down in recent days | Source: CryptoQuant

As you can see in the above graph, the 30-day MA Bitcoin LTH SOPR seems to have hit a specific level around the price bottom in each of the previous two cycles.

These touches of the level in the loss region didn’t exactly coincide with the cycle lows, but they were still quite close, making them good buying opportunities for the crypto.

In recent months, as the bear has taken over, the indicator’s value has declined below the 1 mark, implying the LTHs have been selling at a loss recently.

While the metric has declined deep into the red zone by this point, it’s still not at the level where the historical cycles observed their bottoms.

Though, as the chart shows in the bottom, the DPO (an indicator that’s popularly used for finding cycle tops and bottoms of any quantity) of the LTH SOPR has started turning back up recently.

In the past bear markets, the LTH SOPR reached the bottom level not too long after the DPO reversed trend like this. If a similar pattern follows now as well, it may not be too long until long-term holder loss selling reaches its maximum point.

BTC Price

At the time of writing, Bitcoin’s price floats around $19.2k, up 1% in the past week.

Looks like BTC has been moving sideways again during the last few days | Source: BTCUSD on TradingView
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, CryptoQuant.com

Posted on

Bitcoin Long-Term Holder Dumping May Have Been Behind Revisit Below $19k

On-chain data shows selling from Bitcoin long-term holders may have been behind the recent dip in the crypto’s price below $19k.

Bitcoin Exchange Inflow CDD Has Recently Observed A Sharp Increase

As pointed out by an analyst in a CryptoQuant post, there has been some possible selling pressure coming from the long-term holders recently.

The relevant indicator here is the Bitcoin “Coin Days Destroyed” (CDD). A coin day is defined as the amount accumulated by exactly 1 BTC when sitting idle for 1 full day. The total number of coin days in the market, therefore, represent the sum of time each coin in the supply has been dormant for.

When these coins that had previously been sitting still show some movement, the coin days gained by them are said to be “destroyed” as they reset back to zero. The total number of these is precisely what the CDD metric measures.

Now, since long-term holders keep their coins for long periods, they naturally accumulate significantly higher coin days than the rest of the market. As such, spikes in the CDD can be a sign of activity from this cohort.

Here is a chart that shows the trend in the Bitcoin CDD not for the entire network, but specifically for exchange inflow transactions:

Looks like the 14-day moving average value of the metric has been quite high in recent days | Source: CryptoQuant

As you can see in the above graph, the Bitcoin exchange inflow CDD saw a spike in its 14-day MA value just recently. This suggests that long-term holders have been making some big deposits to exchanges during the last week.

In the past, such spikes in the exchange inflow CDD have usually been bearish for the price of the crypto as these investors usually deposit to exchanges for dumping purposes.

This time as well, shortly after the indicator’s values became raised, BTC observed a plunge from a local high of around $22.5k.

Following this plummet, however, the exchange inflow CDD still hasn’t gone down much and has remained elevated. This could imply that LTH selling may have been the cause behind Bitcoin’s recent brief revisit below the $19k level.

BTC Price

At the time of writing, Bitcoin’s price floats around $19.1k, down 12% in the last week. Over the past month, the crypto has lost 8% in value.

The below chart shows the trend in the price of the coin over the last five days.

The value of the crypto seems to have already recovered back above $19k | Source: BTCUSD on TradingView
Featured image from Jason Hillier on Unsplash.com, charts from TradingView.com, CryptoQuant.com

Posted on

Bitcoin Diamond Hands: Long-Term Holder Supply Surges Up To Near ATH

Data shows the Bitcoin long-term holder supply has surged up recently to near all-time high values as these “diamond hands” add to their holdings.

Bitcoin Long-Term Holder Supply Jumps Up By 250k BTC After The Recent Low

According to the latest weekly report from Glassnode, the current total balances of the long-term holders is only 30k away from the ATH.

The “long-term holders” (or LTHs in short) is a Bitcoin holder group that includes all those investors who have been holding onto their coins since at least 155 days ago, without having sold or moved them.

Generally, the longer holders keep their BTC still, the less likely they become to sell them. Because of this, LTHs are the less likely investor group to sell at any point.

The opposite cohort is the “short-term holders” (STHs), who have had their coins in their wallets for less than the 155-day mark.

Now, the “LTH supply” is a measure of the total number of coins currently sitting in the wallets of the investors belonging to this group.

When the STH supply matures enough and reaches the threshold, these coins are then naturally included in the LTH supply.

Here is a chart that shows the trend in the Bitcoin LTH supply over the past couple of years:

Looks like the value of the metric has been going up in recent days | Source: Glassnode’s The Week Onchain – Week 36, 2022

As you can see in the above graph, the Bitcoin LTH supply had been on a decline since the ATH and hit a low just a while back.

However, during the last few weeks, the indicator’s value has observed an uplift. Since the low, LTHs have added around 250k BTC onto their holdings.

The report notes that the 155-day threshold puts the minimum acquisition period for these investors to be counted as LTHs to be before the LUNA crash.

Due to this, the report thinks it’s possible the supply of these hodlers will stagnate over the next month, or even until mid-October, where the threshold will have then shifted to the post-selloff period.

BTC Price

At the time of writing, Bitcoin’s price floats around $19.8k, down 1% in the last week. Over the past month, the crypto has lost 14% in value.

The below chart shows the trend in the price of the coin over the last five days.

The value of the crypto seems to have not moved much in the last few days | Source: BTCUSD on TradingView
Featured image from Aleksi Räisä on Unsplash.com, charts from TradingView.com, Glassnode.com

Posted on

Glassnode: Bitcoin Long-Term Holders Have Shifted To Distribution Recently

Data released by Glassnode suggests Bitcoin long-term holder behavior has shifted from accumulation to distribution recently.

Bitcoin Long-Term Holders Have Shed 222k Coins Off Their Stack Since May

As per a new report from Glassnode, the BTC long-term holders have been spending up to 47k BTC per month in recent days.

The “long-term holders” (or LTH in short) refer to the cohort of Bitcoin investors that have been holding onto their coins since at least 155 days ago, without selling or moving them.

The “LTH net position change” is an indicator that measures the net number of coins that these HODLers have been selling or buying recently.

When the value of this metric is positive, it means LTHs are accumulating right now. On the other hand, the indicator being less than zero implies this group is distributing at the moment.

Now, here is a chart that shows the trend in the Bitcoin LTH net position change over the past year:

Looks like the metric’s value has been red in recent days | Source: Glassnode’s Market Pulse, 2022-08-05

As you can see in the above graph, the Bitcoin long-term holders started showing deep distribution behavior following the month of May.

However, around three weeks ago, the LTH net position change flipped as these holders began to accumulate. At the peak of this green phase, these investors were hodling at a rate of 79k BTC per month.

But this buying spree didn’t last too long. Soon after, the LTHs again shifted back to a trend of distribution, where they sold at a rate of up to 47k BTC per month. In the past week, the selling has reduced a lot, but the metric’s values still remain red.

Because of all the selling since May, the long-term holder supply has lost around 222k BTC (as of three days ago, when the report released).

The below chart shows how the Bitcoin supply held by LTHs has changed during the last couple of years:

The value of the metric seems to have slid down in recent months | Source: Glassnode’s Market Pulse, 2022-08-05

At their all-time high in May, the LTHs held 13.559 million BTC. Since then, their supply has come down by 1.6%.

It remains to be seen what consequences the new shift towards distribution may have for the crypto. The current bullish momentum may not last too long if the selling trend from LTHs continues.

BTC Price

At the time of writing, Bitcoin’s price floats around $24k, up 4% in the last week.

The value of BTC has jumped over the last day | Source: BTCUSD on TradingView
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, Glassnode.com