Glassnode: “Bitcoin Transition Phase”

Data analytics firm Glassnode analyzed Bitcoin (BTC) on-chain performance in its latest report, observing that price movements are similar to previous bear market dips. According to the famous data provider, Bitcoin’s drop to $ 22,199 occurred alongside important price levels. It is stated that these relate to holders older than the previous cycle and whale assets that have been active since the 2018 cycle, which can make it quite important in this case. Glassnode evaluated the net unrealized profit/loss metric (NUPL) of BTC and included the following statements in its statements:

“The current state of the market plausibly looks like a transitional phase that is common in the later stages of a bear market.”

The NUPL metric can identify whether BTC holders are experiencing unrealized gains or losses at the current location. It compares the average purchase price of all BTC held by investors with the current market price. It can be said to indicate net unrealized profit if the market price is higher, and net unrealized loss if the market price is lower.

According to Glassnode, NUPL’s weekly average has shifted from net unrealized loss to positive since mid-January. This may be a sign that typical BTC holders have net unrealized profits of up to about 15% of market cap at current location, and are similar to transitional phases in previous bear markets. However, Glassnode warned that the adjusted version of NUPL, which announced the losses, shows that the market is only slightly below the breakeven point. Simply put, the current situation can still be considered a bear market zone. Apart from the NUPL metric, another indicator of the “transition phase” is the inflow of new money into the market. Glassnode also evaluated BTC’s transfer volume metric and reported that the cryptocurrency’s monthly transfer volume has increased by 79% since the beginning of January, reaching $9.5 billion per day. In fact, the report can qualify this as a positive sign of growth.