Glassnode’s latest weekly report highlights similarities between current market conditions and the early stages of the 2022 bear market, also known as the crypto winter.
The first metric that indicates stress is the increased risk of major customer capitulation. Glassnode’s cost basis bid quantile, which tracks the cost basis of bids held by major buyers, shows that since mid-November the spot price has fallen below the 0.75 quantile and is trading near $96,100. That puts more than 25% of the BTC supply below the line.
A similar breakdown below the 0.75 quantile marked the beginning of the bear market of 2022. At the same time, the total supply in loss at the 7-day simple moving average has now reached 7.1 million bitcoins, which is the upper end of the 5-7 million range seen in early 2022. Despite these pressures, capital continues to flow into bitcoin based on the realized net capitalization change, which is close to $8.69 billion per month.
That, however, is still well below the summer peak of $64.3 billion per month, according to Glassnode. Off-chain trends show further bearishness from investors. Demand for ETFs continues to weaken, with IBIT posting its sixth straight week of outflows, its longest negative streak since launching in January 2024. Outflows now total more than $2.7 billion in redemptions over the past five weeks. Spot market activity is also deteriorating.
Cumulative Volume Delta (CVD) has reversed and Binance CVD is trending persistently negative, notes Glassnode, SEEbiz reports. Meanwhile, Coinbase’s premium looks set to reverse again, having recently turned positive after a long period in the red. Data on derivatives reinforces the decline in risk appetite. Open interest fell during November in December, suggesting a reduced appetite for risk, especially after the October 10 liquidation flash event.
Permanent funding rates are broadly neutral with short periods of negative prints, and the funding premium has cooled significantly, indicating a more balanced and less speculative environment. Glassnode also notes that traders are not positioning themselves for a strong breakout ahead of next week’s FOMC meeting. The firm sees a cautious stance in the options market where growth is being sold rather than chased.
Earlier in the week, buying of put options dominated as bitcoin approached the $80,000 level. As the price later stabilised, flows shifted towards buying activity as investor fears subsided.
