Bitcoin Showing Similarities with Previous Market Cycles: Glassnode

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The analytics company Glassnode compared the bottom of the current Bitcoin market cycle with those from earlier bear markets in its “week on-chain” report on October 31.

The recent relief recorded in the market appears to have dried up, following a double-top rejection at the $21,00 mark. The market was “hammering out a Bitcoin bottom, with almost textbook resemblance to prior cycle lows,” according to Glassnode.

It stated that similar to prior cycles, investors and hodlers have suffered significant financial losses as a result of the bear market in Bitcoin. It went on to say that the only thing left is a component of time and investor indifference.

Glassnode on Bitcoin Hammering Out a Bottom

Realized Price and Mayer Multiples were two of the criteria that Glassnode utilized to identify cycle lows and a bottom discovery period.

According to Woo Charts, the realized price, or the average acquisition price per coin for the larger market, is currently $21,105. According to Glassnode, “the aggregate market can be considered to be in unrealized loss” when spot prices move below the realized price. For most of the last four months, this has been the situation.

The Mayer Multiple, which is the ratio of price to the 200-day SMA, aids in determining if an asset is oversold or overbought. Markets that are currently oversold cyclically have values below 0.6.

Both the bear markets in 2014–15 and 2018–19 had these circumstances, though not for as long as the present one. The market value is somewhere between the upper and bottom borders of this sideways channel, which typically ranges from the realized price to the balanced price.

It was highlighted that this state of “financial stress” persisted during the transition to the Bitcoin bull market, indicating that the bear cycle may still have a long way to go. Glassnode noted:

“This condition of acute financial stress has been in play for 3.5 months so far, which is shorter than similar intervals in previous bear markets.”

Glassnode concluded that although markets hadn’t yet experienced a surge in fresh demand or a shift to bullish circumstances, “there certainly appear to be seeds put in the ground.”

A small change in the monthly MACD indicator may also portend a larger change.

 

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Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.