45193
Pioneering on-chain market analysis. Advanced charts/data/insights for investors in Bitcoin and digital assets. https://studio.glassnode.com/
Next in our checklist series designed for momentum traders, we're turning to profit and loss metrics. Find out how to optimize your trading strategy by leveraging data on near real-time profit-taking and loss-realization events in the Bitcoin market.
Key insights to discover:
- Spot potential trend reversals by analyzing when Bitcoin traders are taking losses or locking in profits with metrics like SOPR and MVRV.
- Understand market cycle phases to better time your trade entries.
- Identify upcoming seller exhaustion points - a bullish entry signal for momentum traders.
- Learn how to maximize your analysis with SOPR variants.
Download the checklist here: https://glassno.de/3SWE09U
The Week On-Chain 09, 2024
The risk appetite for Bitcoin investors is increasing, with growing signs of speculation appearing across capital flows, exchange activity, derivatives leverage, and even institutional demand.
Executive Summary
- Bitcoins recovery is near completion as capital continues to pour into the asset class, propelling the Realized Cap to $460B, and only 3% shy of its ATH.
- Exchange inflow volumes are near all-time-highs, with Short-Term Holders dominating the flows. This suggests a relatively strong demand for speculation and trading activity.
- Open interest in both futures and options markets are also near all-time-highs, and directional short-sellers continue to bet against the uptrend, resulting in over $465M in liquidation volume over the last 30-days.
Read more in The Week On-Chain newsletter.
In this week's Glassnode Clips, we analyse Futures Open Interest:
- Investors often move to high-leverage futures positions during market upswings, which adds more risk to the system.
- A significant shift of open interest from Binance to CME highlights a change in trader activity and preferences.
- Evaluating open interest in both USD and BTC terms is essential for a true understanding of leverage and market dynamics, beyond Bitcoin's price movements.
Discover more in the latest Glassnode Clips below 👇
https://www.youtube.com/watch?v=b9HROwiunXo&t=28s
How can supply metrics help you identify market inflection points and better time your trades in the Bitcoin market. Find out in the first of our momentum trader's checklist series.
Tailored for traders, the checklist includes:
Five-step method:
- Discover five key questions to guide your analysis of Bitcoin supply dynamics. Learn how changes in supply can correlate significant price movements.
Suggested analysis:
- A deep-dive on how to leverage SLRV Ribbons to spot early signs of market momentum shifts. Find out how to combine this powerful metric with other indicators.
Download the checklist here: https://glassno.de/42PM4gU
The Week On-Chain 08, 2024
With the new Bitcoin ETFs now live for over a month, Bitcoin has continued to impress investors, rallying to over $52k, and holding that level. Meanwhile, many in futures markets continue to bet against the trend, seeing an uptick in short liquidations.
Executive Summary
- Global market assessment using NUPL and MVRV indicators.
- Analysis of futures market open interest, and leverage ratio.
- Observations of short-side interest betting against the trend.
- Overview of exchange flows, comparing dominance of the majors.
Watch our latest video analysis report.
In this week's Glassnode Clips, we analyse Long-Term Holder Supply and GBTC:
- Long-term holders and GBTC significantly impact Bitcoin's market dynamics, showing most short-term holders remain in profit unless they sold during recent corrections.
- GBTC's accumulation and the movement of its coins play a crucial role in shaping the long-term holder supply, affecting the market's supply and demand balance.
- The movement of approximately 148,000 Bitcoin by long-term holders highlights significant market activity, suggesting that observing these changes can reveal insights into investor sentiment and the direction of the market.
Discover more in the latest Glassnode Clips below 👇
https://www.youtube.com/watch?v=vNjifxSebO8&t=1s
The chart below presents a breakdown of the Bitcoin supply by the cost basis at which it was acquired.
We can see that the vast majority of coins (87%) were acquired below $48k, with a very large cluster of Short-Term Holder supply located between $40k and $45k.
However, Long-Term Holders dominate the 13% of supply held in loss, reflecting 'top buyers' from the 2021 rounded top and ATH.
Discover more in the latest Week On-Chain below 👇
https://glassno.de/3wfrElD
Bitcoin has reclaimed the $1T market cap, a key milestone, for the first time since December 2021. It now has a bigger capitalization than giants such as Walmart, Tesla, or even Berkshire Hathaway. However, for valuing digital assets like BTC, market cap has its limitations.
For deeper insights into actual capital inflows that can be readily incorporated into directional trading strategies, explore the Realized Cap, a key on-chain metric. Valuing each coin at the price of its last move, it makes a superior metric for gauging true trends and momentum.
To learn about this foundational on-chain metric, click here: https://insights.glassnode.com/the-realized-cap-foundation/
In this week's Chart of the Week, we examine the Short-Term Holder MVRV Ratio, an indicator for short-term Bitcoin market trends.
How does this metric inform us about potential local tops or bottoms? With historical data showing that peaks in MVRV often align with market adjustments, what do the current MVRV Ratio levels suggest for the near-term market direction? https://www.youtube.com/watch?v=Eja2CRtwhw8
After the challenging recovery since the FTX collapse, this indicator has advanced to 2.06, entering the High Risk 🟧 regime.
As noted, these levels are typically seen during the early stages of bull markets, as long-term investors return to a relatively meaningful level of profitability.
Read the Report here: https://glassno.de/49jl8IQ
The Week On-Chain 06, 2024
On-chain data provides analysts and investors with a remarkable degree of transparency into the performance, adoption, and investor positioning within digital assets. In this piece, we highlighted several approaches and frameworks for assessing market momentum across various data categories.
Executive Summary:
- Tools available to monitor positive and negative market momentum.
- Indicators of inflection points and shifts in direction.
- Confluence across several on-chain categories for robustness.
Read more in The Week On-Chain newsletter and watch our latest video analysis report.
In this week's Glassnode Clips, we analyse the GBTC Balance:
- GBTC's market impact is notable, with its transition from a closed-end fund to an ETF enabling share redemptions and significantly influencing Bitcoin's market dynamics, especially during the shift to a discount phase.
- The conversion of GBTC to an ETF led to significant Bitcoin outflows, including around 161,000 Bitcoin, largely due to redemptions and ETF fees.
- The ongoing market dynamics from GBTC's transition are still unfolding, with substantial outflows suggesting a shift of coins to other ETFs and a relatively modest market correction observed so far.
Discover more in the latest Glassnode Clips below 👇
https://www.youtube.com/watch?v=KS-1FvqLH0Y&t=2s
The Bitcoin Realized Cap remains just -5.4% shy of its previous ATH of $467B, and is currently experiencing strong capital inflows.
That said, the duration for this recovery to accelerate has been markedly slower than prior cycles, arguably due to the significant supply overhang from challenging trades like the GBTC arbitrage.
🥇 2012-13 Cycle 0.22% daily
🥉 2015-16 Cycle: 0.09% daily
🥈 2019-20 Cycle: 0.17% daily
🐢 2023-24 Cycle: 0.05% daily
Discover more in the latest Week On-Chain below 👇
glassno.de/3SjCBtJ
The Week On-Chain 05, 2024
The Bitcoin market continues to show resilience, recovering from the initial sell-the-news drawdown following ETF approvals. In particular, the market is working through the significant supply overhead created by investors rebalancing capital out of the GBTC product since its conversion.
Executive Summary
- Bitcoin price performance since the 2022 lows shows striking similarity to prior cycles, albeit recovering somewhat slower, but in a more resilient manner.
- Despite a modest uptick in older coin spending following ETF approvals, the majority of long-term Bitcoin investors remain unwilling to part with their coins at current prices.
- Network activity remains low in terms of entities, but monetary volume transferred on-chain, and specifically to exchanges remains robust, and resembles prior bull market cycles.
Read more in The Week On-Chain newsletter and watch our latest video analysis report.
In this week's Glassnode Clips, we focus on Long and Short-Term Holder Supply:
- Market trends and investor behaviors are significantly impacted by changes in the balance between long-term and short-term Bitcoin holders.
- The distribution of long-term versus short-term holders serves as a market sentiment indicator, where an increase in short-term holders often aligns with market peaks, signaling new investor influx and potential volatility.
- The current market state, marked by a modest increase in short-term holder supply, suggests it isn't in a robust bull run, and a declining market could indicate insufficient demand, reflecting weaker market strength.
Discover more in the latest Glassnode Clips below 👇
https://www.youtube.com/watch?v=8zECAQxOv1A&t=2s
Following a week of explosive price action and strong capital inflows, the Bitcoin Realized Cap has experienced a near full recovery, increasing to a value of $467.2B.
This places our current value just -0.22% below the ATH of $468.3B.
Discover more in the latest Week On-Chain below👇
https://glassno.de/3OXJOyt
During bear markets, liquidity is predominantly provided for the Top 50 tokens, as this is where the majority of trade volume occurs. The Top 10 tokens are mainly comprised of WETH, WBTC, and Stablecoins.
By looking at the percent change in TVL for each token category, we can detect an increase in liquidity provided for the Top 10 (5.14%) and Top 20 (10.9%) tokens, whilst liquidity has been removed for tokens ranked 20 to 50. This suggests that the market appetite for long-tail assets has not yet picked up meaningfully.
Discover more in the latest Week On-Chain below 👇
https://glassno.de/4bUAXaW
Today, we're providing a status update on our Bitcoin Risk Assessment Framework, a tool for discretionary traders to gauge market sentiment and underlying risk. Below, you can see the latest reading on selected risk metrics. High volatility ahead? Take a look.
Want to checkout all the metrics in our Risk Assessment Dashboard? Click here: https://glassno.de/48c6bXT
In terms of asset performance, Bitcoin and Ethereum are leading the pack, with YTD gains of +17.6% and +18.2%, respectively. We note that following the approval of the Bitcoin ETF, ETH has started to outperform BTC, which is a change from the relative underperformance throughout 2023.
On the other hand, the aggregate Altcoin market cap has not experienced the same performance, with YTD growth being less than half of the two majors.
Discover more in the latest Week On-Chain 👇
glassno.de/4bUAXaW
We can see that the total volume of Bitcoin LTH Supply held in loss is currently 777.8k BTC, and is trending towards the zero bound as prices rise. Just 6.5% of the aggregate LTH supply is therefore held in loss.
Previous instances where the LTH cohort held a similar coin volume in loss corresponds with early bull market conditions (with 2019 as an arguable outlier).
Discover more in the latest Week On-Chain below 👇
https://glassno.de/3wfrElD
With Bitcoin breaking through the $52K region, the Short-Term Holder cohort responded by locking in a Net Realized Profit / Loss of +$647M, the largest since the 2021 all-time high formation.
For further information regarding Short-Term Holder Capital Flows, please visit our Dashboard below 👇
https://glassno.de/43OgVKg
Explore the latest in our February 2024 Finance Bridge: Insights on Bitcoin ETF approvals, stablecoin growth, and crypto volatility trends. Learn how these factors influence capital flows and trading strategies in the evolving market. Dive into our analysis for essential data on Ethereum's performance, market momentum, and actionable strategies for traders. A must-read for those trading and investing in the digital asset market at professional and institutional levels.
Read the full analysis here: https://glassno.de/3HX4rae
The Week On-Chain 06 ,2024
Bitcoin investors have been rewarded for their patience and conviction, with BTC prices rallying to multi-year highs above $50k. The volume of supply held at a loss is also thinning quickly, with just 13% falling into this category.
Executive Summary
- Long-Term Holders have spend approximately 300k BTC since their supply peaked in Nov 2023. Just over half of these reflect GBTC outflow volumes.
- With the market trading at multi-year highs above $50k, the volume of supply held in loss is thinning out, reaching just 13% of the global total.
- The ETF sell-the-news correction in Jan-Feb has many characteristics of a classic 'bull market correction' through the lens of Short-Term Holders.
Read more in The Week On-Chain newsletter and watch our latest video analysis report.
In this week's Glassnode Clips, we analyse SOPR Momentum:
- SOPR (Spent Output Profit Ratio) serves as a quick indicator, providing immediate insights into market changes by tracking profits or losses from spent coins, contrasting with slower-moving unrealized profit and loss metrics.
- SOA (Spent Output Age Bands) offers early warnings of shifts in profitability and market sentiment, relating closely to SOPR and comparing short-term to long-term averages for insight.
- Together, SOPR and SOA reveal market momentum by showing how profit-taking rates and demand balance each other, influencing trends and market stability.
Discover more in the latest Glassnode Clips below 👇
https://www.youtube.com/watch?v=VmuvpTzcTFo&t=36s
Assessing Risk in a Bitcoin Bull
On-chain data provides both investors and analysts with a plethora of new tools to diagnose and assess the state of the chain from a multitude of viewpoints. In this article, we produce a new framework for assessing the degree of market risk across various data categories.
Executive Summary
-In this article, we introduce a new Risk Assessment framework which utilizes a suite of core on-chain instruments covering both Short-Term and Long-Term risk cycles.
- Equipped with this new framework, we aim to provide investors and analysts alike with a robust model for assessing drawdown risk from a data-driven standpoint.
- In conclusion, we compile all metrics considered into a heatmap to assess the confluence of risk across a variety of data categories.
Discover more in our latest research article.
Bitcoin Transfer Volumes remain extremely robust with around $7.7B/day in economic volume processed.
However, an elevated presence of large size entities can be observed, with the average Volume per Entity soaring to value of $25.8k/transaction.
Discover more in the latest Week On-Chain below 👇
https://glassno.de/3SjCBtJ
Are Bitcoin sellers taking profits? Are long-term holders starting to sell? We've created an interactive guide covering 3 essential on-chain metrics that will help you uncover the market sentiment.
1. SOPR: Detect market consolidation or reversal points, understanding when sellers are taking profits. Interactive view: https://glassno.de/3UqImZ3
2. MVRV: Identify market conditions as overbought or oversold, steering clear of false signals. Engage with the metric here: https://glassno.de/3HG1UBg
3. HODL Waves: Anticipate price movements by analyzing Bitcoin holding patterns for shifts in supply and investor confidence. Learn more about HODL Waves: https://glassno.de/491RmIO
Read the full guide here:https://glassno.de/3SIvSuC
For traders and investors aiming to leverage these insights, we offer API access to SOPR, MVRV, and HODL Waves metrics.
Start with our free trial to elevate your trading strategy. Explore the guide and secure your API access here: https://glassno.de/491FpCW
Exchanges remain the primary venue for trading activity, and deposit and withdrawal volumes have experienced a significant expansion, hitting $6.8B/day.
The current volume rivals peaks set during the 2021 bull market, with only 68 trading days (1.5%) recording a higher value.
Discover more in the latest Week On-Chain below 👇
glassno.de/3SjCBtJ
Assessing the severity of Bitcoin Bull Market Corrections by cycles, an increased level of resilience can noted across our current cycle.
Currently, the largest drawdown has reached a value of only -20.1%, paling in comparsion to historical precedence.
For further information on Bitcoin Price Performance, please visit our Dashboard: https://glassno.de/40Xt7GQ
In our latest Chart of the Week, we discover the significance of the Short-Term Holder Supply in Loss metric.
This cyclical indicator aids traders employing momentum strategies in the Bitcoin market. Gain insights into its role in distinguishing between market corrections and potential peaks, offering valuable information for strategic decision-making. https://www.youtube.com/watch?v=Mjcde_26JSA