Glassnode, a prominent provider of on-chain analytics, has suggested through a tweet that the Bitcoin market downturn might have ended, as there are indications of a strong rebound in the market.
Bitcoin has been performing remarkably well, with on-chain metrics indicating that it has gained considerable support and strength, surpassing its performance since reaching an all-time high in 2021.
The returns of Bitcoin over the last quarter have experienced a significant surge of 70% since October 2021, while the weekly returns have climbed up to 36%.
This outstanding performance has positioned Bitcoin as the top-performing asset class of the year thus far. These trends are in contrast to those observed in 2022, indicating a favorable shift in the market.
Bitcoin: Long-term & Short-term Holder Metrics Suggest Favorable Regime Shift
Glassnode’s report analyzes Bitcoin’s on-chain indicators, such as its correlation with gold and the risk of counter-party, and notes a high balance of BTC held by long-term holders at 14.161 million BTC, nearing an all-time high, while short-term holders have maintained a steady balance of 2.914 million BTC in 2023.
There are three significant supply clusters noticeable in the chart of investor acquisition prices, namely the Bottom Formation Cluster, the Recent Acquisition Cluster, and the Cycle Survivors.
Interestingly, more than 23.3% of the available supply is held by long-term holders currently facing losses. These holdings are not traded on exchanges. Additionally, the current supply structure appears similar to that of early 2016 and early 2019.
Glassnode’s report further suggests that YTD market strength is supported by an explosive uptick in coins held at a profit, with 6.2 million BTC returning to profit in 2023, indicating a large cost basis foundation below $30k.
The report concludes that several on-chain indicators suggest that the worst of the bear market conditions may be behind us, with Bitcoin sitting in neutral territory above the forming supply cluster between $16k to $25k.
For further insight, the report advises readers to review Glassnode’s previous reports on the bear market conditions in 2022 and the May 2021 sell-off.
Nevertheless, Glassnode’s report shows that on-chain indicators are pointing to a robust recovery in the Bitcoin market, with several crucial factors supporting the market’s strength.
With Bitcoin posting strong returns and showing increased correlation with gold, the market may well be behind the bear, and investors may want to keep a close eye on Glassnode’s upcoming reports for further insights.
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