The crypto economy has slipped under the $1 trillion mark to the $970 billion range, as a large number of digital currencies have lost more than half their USD worth since November 2021. Bitcoin is down 70% from the all-time high last year, and a new report from Glassnode Insights calls the current bear market “a bear of historic proportions,” while highlighting that “it can reasonably be argued that 2022 is the most significant bear market in digital asset history.”
“The 30-day position change of the realized cap (Z-Score) allows us to view the relative monthly capital inflow/outflow into the BTC asset on a statistical basis,” Glassnode’s blog post explains. “By this measure, bitcoin is currently experiencing the largest capital outflow event in history, hitting -2.73 standard deviations (SD) from the mean. This is one whole SD larger than the next largest events, occurring at the end of the 2018 Bear Market, and again in the March 2020 sell-off.”
Glassnode’s report details that because bitcoin got so large, the impact has been magnified. “As the bitcoin market matures over time, the magnitude of potential USD denominated losses (or profits) will naturally scale alongside network growth,” Glassnode’s research report says. “However, even on a relative basis, this does not minimize the severity of this $4+ billion net loss.”
The current cycle low of the MVRV is 0.60, with only 277 days in history recording a lower value, equivalent to 11% of trading history.
Last week, BTC and ETH prices increased in value after taking a hard hit the week prior and remained consolidated for most of the week. BTC prices are still down 8.1% during the past two weeks and the crypto asset’s USD value is down 0.3% over the last 24 hours. ETH values have slid 0.1% during the last 24 hours and two-week stats show ETH is down only 1.3% against the U.S. dollar. Glassnode’s post shows that the data and studies done point to one of the most significant crypto bear markets in history.
The Glassnode Insights report concludes by saying:
The various studies described above highlight the sheer magnitude of investor losses, the scale of capital destruction, and the observable capitulation events occurring over the last few months. Given the extensive duration and size of the prevailing bear market, 2022 can be reasonably argued to be the most significant bear market in the history of digital assets.
What do you think about Glassnode’s bear market report? Would you say that this is one of the worst bear markets on record? Let us know what you think about this subject in the comments section below.