Current Bitcoin Bear Market Exactly Like Previous Ones But There’s a Catch
In its October 31 “week on-chain” report, analytics provider Glassnode made a number of comparisons between the current Bitcoin market cycle low and those of previous bear markets.
Last week’s relief rally appears to have collapsed with a double rejection, as reported CryptoPotato yesterday. Glassnode said the market was “pounding a Bitcoin bottom, with an almost classic resemblance to previous cycle lows.”
He reported that, as in previous cycles, the Bitcoin bear market has inflicted severe financial losses on investors and holders. The last thing left is a component of time and investor apathy, he added.
Hammer a bottom
Glassnode used a number of metrics, such as realized price and Mayer multiples, to determine cycle bottoms and a discovery phase of bottoms.
The realized price, or average acquisition price per coin for the broader market, is currently $21,105, according to Woo Charts. When spot prices are trading below the realized price, “the overall market can be considered to be in an unrealized loss,” Glassnode noted. This has been the case for most of the past four months.
The Mayer multiple, which is the ratio of the price to the 200-day simple moving average (SMA), helps identify oversold or buy conditions. Values below 0.6, where they currently stand, signify cyclical oversold markets.
These conditions played out in both the 2014-15 bear market and the 2018-19 bear market, but not as long as the current duration. The upper and lower bounds of this sideways channel tend to be around the realized price close to the equilibrium price, with the market value somewhere in between.
He noted that this “financial stress” condition continues into the Bitcoin bull market transition, so there could be a lot more time to go in this bear cycle.
“This acute financial stress condition has been in play for 3.5 months so far, which is shorter than similar intervals in previous bear markets.”
Glassnode concluded that markets have yet to see an influx of new demand or a transition to bullish conditions, but “there appear to be seeds planted in the ground.”
A slight shift in the monthly MACD indicator could also hint at a longer-term change.
Bitcoin Price Outlook
Bitcoin was trading flat that day at $20,510 at the time of writing, according to CoinGecko. It has made just over 6% over the past seven days but is trailing a double top formation suggesting further losses.
Bitcoin is currently down 70% from its all-time high nearly a year ago, and the bears are not out of the woods yet.
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