Bitcoin (BTC) price is showing notable strength at $17,000. glassnode According to the data, some indicators that monitor the sales speed and on-chain investor behavior reveal that the number of factors triggering sharp sales waves has decreased.
FTX’s bankruptcy triggered a historic sell-off that led to $4.4 billion in Bitcoin losses. Analyzing the actual loss with the daily weighted average indicator, Glassnode analysts show that the on-chain loss has started to lighten.
According to Glassnode, Bitcoin’s profit rate versus realized loss has hit an all-time low. At the end of the last bull market, the loss was 14 times greater than the realized profit. Historically, this coincides with moments when the market changes positively.
On-chain data shows that the realized loss has decreased, the price of Bitcoin is above the stable price and the realized market value has decreased. Therefore, excess liquidity in highly leveraged formations is also eliminated.
The realized market cap is the net sum of capital transferred to and withdrawn from the space since BTC was launched.
The current realized value of BTC is 2.6 percent higher than the peak in May 2021. In other words, Bitcoin is experiencing a record withdrawal, and all excess liquidity from bad debt and over-leveraged formations has been withdrawn from the market.
In the past, clearing the ecosystem of bad debt set the stage for future bull markets.
“Market capitalization in 2010-11 saw net capital outflows equivalent to 24 percent of the peak. Even though the realized market value in 2014-15 was the lowest in history, there was an insignificant capital outflow of 14 percent. In 2017-18, the realized value decreased by 16.5 percent, which represents the closest value to the current cycle of 17 percent. By comparison, the third largest capital outflow was recorded in the current cycle, leaving the 2018 cycle, the most established example ever.”
may have bottomed out
Balanced price and delta price are used to analyze previous bear cycles. In previous cycles, the Bitcoin price was trading between the 3% stable price and the delta price.
The current stable price is $12,000-15,500, while the delta price is concentrated between 18,700-22,900. Bitcoin, like previous bear markets, has found support above the stable price and at $15,500.
The on-chain analysis shows that market participants are slowly coming out of the expectation of extreme declines and the peak in realized losses and forced sales has passed. In other words, Bitcoin may have found the bottom level where it can show a sustainable recovery.