Glassnode Reports Lack of Bear Market Confirmation for Bitcoin

Glassnode reveals that Bitcoin has not yet confirmed a bear market in the current cycle, with significant Unrealized Loss indicators yet to signal a bearish phase. The Unrealized Loss metric varies for short-term and long-term holders, showcasing contrasting trends in losses. Short-term holders are experiencing significant losses while long-term holders remain unaffected, indicating that a shift could occur as new buyers become long-term holders. Bitcoin’s price is presently stable around $85,000.

The on-chain analytics firm Glassnode recently reported that a significant confirmation of a bear market for Bitcoin has not yet occurred in the current market cycle. The report highlights an ongoing trend regarding the Unrealized Loss indicator for two key Bitcoin holder groups.

The Unrealized Loss metric quantifies the aggregate losses held by Bitcoin addresses by comparing previous transfer prices with the current market value. If a coin’s previous trading price exceeds its current price, it is considered to be in a state of loss. By aggregating these losses across all circulating coins, the total unrealized loss for the network is determined.

Glassnode introduces a new metric, Unrealized Loss per Percent Drawdown, which assesses losses in relation to the percentage decline from Bitcoin’s all-time high. This provides a clearer understanding of losses as the market contracts. The chart depicting this indicator for short-term holders (STHs) shows that since Bitcoin is currently priced lower than levels within the last 155 days, STHs are incurring significant losses.

The increase in the Unrealized Loss per Percent Drawdown suggests that STHs experience comparable losses to those observed during earlier bear market beginnings. Conversely, long-term holders (LTHs), who have held their Bitcoin for over 155 days, currently do not show unrealized losses. Historically, spikes in LTH losses have indicated the confirmation of bear market conditions, typically occurring after market peaks.

At present, this bearish signal for Bitcoin has not materialised. However, as new buyers transition into LTH status, an uptick in unrealized losses may emerge. Meanwhile, Bitcoin’s price has entered a period of stability, holding around $85,000, marking a pause in its recovery rally.