These were the findings of analytics provider Glassnode in its latest weekly report for 9/11.
Glassnode published its latest weekly report, dated September 11, 2023, where it reports the current situation of BTC. A post on X explains the following:
“Liquidity across the digital asset market continues to dry up, with both on-chain and off-chain volumes reaching historical lows. Whilst HODLing remains the market preference, a significant proportion of the supply is teetering on the edge of falling into a significant unrealized loss.”
The report further notes that “HODLing certainly remains the primary market dynamic, which both signals a steady conviction amongst existing holders, but highlights that these investors are likely the only ones who remain.”
More Pain for Bitcoin Holders in the Short Term
In what is being called a “liquidity drought,” Glassnode said long-term BTC holders are holding tight to their holdings and “spending very little.”
This makes sense, since long-term investors have been through bull and bear markets before and are unfazed by them. Those who got in during the last bull market could well be underwater now that the asset has retraced 63% from its high.
Glassnode noted that the realized value settled on the chain remains extremely quiet. The market generally locks in minimal gains or losses, meaning that most coins are trading close to their original purchase price.
“Realized Profit and Loss are similarly at levels equivalent to the 2020 market, highlighting what is arguably a complete and total wash-out of the exuberance from the 2021 bull market.”
The supply of long-term holders has reached a new all-time high of 14.74 million BTC. In contrast, the supply of short-term holders, which is more active, has fallen to its lowest level since 2011 at 2.46 million BTC.
Regulatory concerns remain a looming shadow over the crypto industry. Until there is clarity, especially in the United States, big players and institutions can adopt a wait-and-see attitude.
FTX may receive the green light to start selling its cryptocurrency holdings on September 13, and it has plenty. This could put further downward pressure on markets, which are already in retreat this week.
Messari founder Ryan Selkis posted on X the following:
“We’re approaching max pain. Bear markets last longer and go deeper than we want them to. Need a couple of capitulations, then chop, then rebirth. This is near the worst sentiment that I’ve ever seen. Deeper than 2019. Closest feeling was 2015 for me.”
Markets Fall to Six-Month Low
Total capitalization has fallen to its lowest level since mid-March. Markets fell to $1.04 trillion in early trading in Asia on Tuesday. The last time they fell below the psychological level of $1 trillion was on March 11.
A slight recovery in recent hours has taken the total cap to $1.06 trillion, but the bears are watching. BTC and ETH are down 0.6% and 2%, respectively, and altcoins are suffering the most.
Following Glassnode’s latest report, many sellers are likely to arrive in the event of a bullish reversal, especially near the short-term buyers’ equilibrium level around $26,000.
Taken together, the DXY price action and on-chain data suggest that buyers could return sooner than expected, making the current price action a potentially lucrative opportunity to open long Bitcoin positions.
By Audy Castaneda
