bitcoin and cryptocurrency While the markets are focused on the news from the FED, Russia and Ukraine war on the one hand, what is the latest situation in on-chain data?
Inspecting on-chain data glassnode He published his 11th week report.
The report stated that short-term accumulation trends are softening and energy is accumulating for a possible capitulation.
The following statements were used in the introduction part of the report;
“Despite highly constructive long-term demand trends, Bitcoin accumulation trends have softened in the short-term.
The potential energy for a capitulation event exists but has not yet manifested as in previous market cycles.”
“Late Bearish Signal”
In the report, some conclusions were reached by examining multiple graphs and in-chain data. Some of the results highlighted by analysts are as follows;
“Uncertainty and macro risks are softening short-term accumulation trends.
82% of the supply (2.51M BTC) held by Short-Term Holders is currently held at an unrealized loss, while the total supply held by Long-Term Holders is close to all-time highs.
Despite weak short-term demand, retention remains the preferred strategy and the proportion of young coins is at an all-time low. This is historically associated with late bear markets.”
The following statements were included in the summary section of the report;
“Uncertainty associated with many macro and geopolitical risks has weakened short-term on-chain accumulation trends since January.
While there is no widespread change in investor belief at the macro scale, we may see marginally increasing spending of old coins this week.
With 2.51 million BTC held at an unrealized loss by Short-Term Holders, sellers risk not being completely exhausted yet. There is ‘potential energy’ for a capitulation event and such an event would be consistent with all previous bear cycles.”
You can access the original report here.
What is Capitulation?
Capitulation means surrender. In a sharp drop in price, it means selling Bitcoins that are in HODL position at a loss. Towards the end of the previous bear markets, similar capitulation candles were seen in Bitcoin.
*Not Investment Advice.