Glassnode took the pulse of the cryptocurrency market in a detailed research report published the other day. Leveraging many different tools and data, the worst days are probably over for the cryptocurrency market, according to the Glassnode report. Pointing out that Bitcoin, which has exhibited an upward performance of more than 80% since the beginning of 2023, has increased its correlation with gold, the report pointed out that this situation did not weaken even during the US-based banking crisis. The report revealed that investors’ belief in the concept of “hard money” has increased in the past period. While it was stated that all data pointed to a more positive or at least neutral market atmosphere, it was underlined that contrary to the volatile structure of the market, user psychology and on-chain data showed clear consistency with past cycles.
“While Bitcoin and digital assets experience a relatively high degree of market volatility, many on-chain indicators are surprisingly consistent, reflecting collective human decisions. Bitcoin is in neutral territory and above the underlying supply cluster of $16,000 to $25,000 where substantial assets change hands.“
Marking three important supply clusters in an overall perspective, Glassnode revealed that these are priced below $25,000, between $25-30 thousand and above $30,000. Those priced below $25,000 are those that changed hands substantially between June 2022 and January 2023, according to the charts. There is a fairly even balance between long-term holders (LTH) and short-term holders (STH) in this range. Investors with a final purchase level of 25 thousand to 30 thousand dollars constitute 7.25% of the total supply. According to this data, investors who bought from the bottom sold their assets between 25-30 thousand dollars to make a profit, but this sale constitutes a small denominator. On the other hand, 22% of the total supply represents those who survived the last month cycle, that is, users who did not make any sales in 2022. This shows that long-term belief is embraced by a substantial segment. In this direction, investors are targeting higher prices and do not miss the opportunity to buy at the levels that can be described as the bottom.
According to the NUPL metric, which reveals how much of Bitcoin’s market value is held as unrealized profit, the market is positioned at a fairly neutral level with its current value of 0.36. According to the report, this coincides with past cycles of transitions between bear and bull markets. It also reveals that the market is neither overly discounted as around $16,000, nor overvalued as it peaked around $68k.
Looking at the chart of cryptocurrency hodlers, there is a clear agreement with the previous bull starts. Both of the above two bull-start observations show that the number of hodlers increases at the peak and decreases significantly at the bottom. Currently, the number of users holding Bitcoin has started to move up from a bottom, indicating that the cycle is likely to turn in favor of the bulls. On the other hand, Bitcoin price may no longer be in a region below its value.
Significant increases in on-chain activities and its proportional increase in consistency with the end of last month’s seasons drew attention. In recent months, when the pressure of increasing on-chain activities on the price has turned positive, the battle of miners to find a block is also gaining momentum. Although this causes the difficulty level to increase, it also highlights positive indicators such as network security and frequency of use.
Looking at the presented report from the general perspective, the behavior of Bitcoin investors seems to be quite consistent throughout the cycles, and all the data in the current table we are in shows that at least the worst days are behind.