The on-chain data analysis platform Glassnode concluded in its analysis report at the beginning of the month from a number of indicators such as the ratio of backtesting, capital outflows, and investor losses… We are experiencing the “most destructive” bear market in the history of digital assets. (Recap:Bitcoin breaks through 20,000 magnesium! Founder of Runway Capital: SBF’s bailout of BlockFi may represent “the bottom of the bear market”) (background supplement:Another lending platform suspends withdrawals! Vault may be reorganized, and it was only invested by Paypal founder’s venture capital last year)
allThe overall cryptocurrency market is under enormous pressure against the unfavorable macro background of the Federal Reserve’s (Fed) tightening monetary policy and historically high inflation. In order to manage the chain reaction caused by poor management, the data analysis platform Glassnode identified 2022 as the “most destructive” bear market in the history of digital assets in its analysis report just released at the beginning of the month.
Various data indicators of Bitcoin: drawdown ratio, duration, capital analysis…
The article first pointed out: From the perspective of historical data, the low point of the market is usually when Bitcoin has fallen 75-84% from its historical high. At present, the price of BTC has fallen to the historical high by about 73.3%; Duration, indicating that the current bear market is still within the historical scale;
2015 to bottom lasted 410 days 2018 to bottom lasted 362 days 2019-20 bottom lasted 260 days 227~435 days from 2021 all-time high
If looking at the realized price (Realized Price), the BTC spot price is currently about 10% lower than the realized price ($22,650), which means that the average market participant position is already in a state of floating losses. But this is uncommon in the historical record, and has only happened three times in the past six years, when the new crown epidemic broke out in March 2020, and in November 2018, both events laid the foundation for the bear market cycle at the time.
“Realized price” refers to the realized market value obtained by summing the market prices of all bitcoins at the time of the last on-chain action, divided by the circulating supply, which can be used to assess the actual cost of market participants.
At the same time, the report also mentioned that Bitcoin is currently experiencing the largest capital outflow in history, with an average of -2.73 standard deviations (SD), which is one standard deviation larger than the previous two largest bear markets in history (2018). end of the bear market, and the March 2020 sell-off); investors’ one-day net realized losses hit an all-time high of $4.234 billion in late June.
To sum up, the 2021-22 Bitcoin bear market, Glassnode has drawn the following statistics and observations:
Prices have fallen 73.3% from their all-time highs, matching the ceiling of previous bear market lows. The duration from top to bottom is between 227 and 435 days, depending on where the bear market started. The deviation below the 200-day moving average is huge, with only 2% of historical sessions performing worse than the current one. On a statistical basis, the market has achieved its largest monthly drop in history. Only 3.5% of historical transactions have seen larger capital outflows.
We can now assert that the 2021-22 Bitcoin bear market is one of the most destructive in history, both in terms of severity, depth, capital outflows, and scale of investor losses.
Ethereum also suffered a setback
In addition, Ethereum (ETH), the second-largest by market capitalization, has also been hit hard. The report summarizes some statistics of ETH during the market downturn:
Ethereum’s -79.5% retracement from its all-time peak is well within the upper bound of previous bear market bottoms. Bitcoin’s dominance controls the direction of capital flows, which historically bodes well for Ethereum’s continued underperformance over the next few months. In the past 6 months, there have been two of the largest capital tumbles in Ethereum history, with a combined net market capitalization of $27.6 billion. Both ETH and ETH 2.0 have seen their MVRV (float market cap/realised market cap) shrink significantly, indicating that ETH holders are holding large unrealized losses. Ethereum trading profitability continues to hover at the lowest level since January 2019, with investors realizing an average loss of around -16% per trade.
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