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Pioneering on-chain market analysis. Advanced charts/data/insights for investors in Bitcoin and digital assets. https://studio.glassnode.com/
Introducing the Q2 Guide to Crypto Markets by Coinbase Institutional and Glassnode.
This second instalment analyzes price trends and key themes in the digital asset landscape in 2024.
Some highlights from the 59-page guide:
- Data on the bull: The last two bull markets lasted 3.5 years; currently, we're 1.5 years into another. Previously, price increases reached 113x and 19x, with this cycle ‘only’ reaching 4x so far.
- Rising popularity, rising maturity: As the crypto market grows, spot Bitcoin ETFs boost accessibility for institutional investors. Last quarter, they attracted $12B and now hold $60B in BTC, becoming key market influencers and among the fastest-growing ETFs.
- The perfect diversifier? From April 2019 - March 2024, adding a small crypto allocation to a traditional 60/40 portfolio notably boosted returns: a 3% allocation yielded 52.9% returns, & a 5% allocation brought 67.0%, far surpassing the traditional strategy’s 33.3% returns.
Download the guide here: https://glassno.de/3VUhtxx
In this week's Glassnode Clips, we analyze NUPL by Cohort:
- Capitulation signs are revealed by NUPL by Cohort when all market participants face unrealized losses, signaling potential market bottoms and recovery points.
- Rising unrealized profits in any cohort as Bitcoin surpasses previous highs indicate a shift from enthusiasm to euphoria in the market.
- Historical analysis of NUPL shows that breaking all-time highs often leads to significant profit realization among cohorts, marking critical market phases.
Discover more in the latest Glassnode Clips below 👇
https://www.youtube.com/watch?v=BQ6B4xyJ1xo&t=1s
As the market reclaimed the 2021 cycle high, the Bitcoin Relative Realized Profit peaked at 1.8%, suggesting 1.8% of the market cap was locked in as profit over a 7-day period.
This is significant but remains comparatively lower than the profit-taking intensity during the January 2021 rally (3.0%.)
Discover more in the latest Week On-Chain below 👇
https://glassno.de/43OJxEt
The Week On-Chain 15, 2024
In this edition, we analyse the surge in both spot trading, and onchain exchange volumes for Bitcoin underlying the strong YTD performance. The market has also transitioned into a euphoric phase, as profit-taking has climbed accordingly.
Executive Summary
- Bitcoin’s strong performance over the last 12 months is supported by a surge in both spot trade volume but also exchange deposit and withdrawal volumes.
- By inspecting the cumulative volume delta (CVD), we can see that a majority of 2023 saw net selling activity on the taker side, even though corrections have been historically mild and less than 20%.
- Profit taking by long-term holders spiked meaningfully into the $73k ATH and is cooling down in recent weeks. This comes alongside an uptick in new demand brought on by the US spot ETFs.
Read more in The Week On-Chain newsletter.
In this week's Glassnode Clips, we analyze SOPR Variants:
- Analysis shows sell pressure from long-term holders and GBTC intensifies as Bitcoin surpasses previous highs, following a cyclical pattern.
- SOPR metrics reveal the profit or loss on coins spent, highlighting a surge in profit-taking, especially by long-term holders during the current cycle.
- The entry of new liquidity through ETFs and media attention leads to accelerated profit-taking, with SOPR metrics peaking, indicating key moments of market tops and transitions.
Discover more in the latest Glassnode Clips below 👇
https://www.youtube.com/watch?v=hXSExzZbY7E&t=2s
Assessing the Bitcoin Short-Term Holders, we can see that their Profit / Loss ratio remains well within a profit dominated regime, with profit taking outsizing losses by 50x.
Regular retests of the equilibrium level of 1.0 suggests that profits are being absorbed, and investors are generally defending their cost basis during corrections.
Discover more in the latest Week On-Chain below 👇
https://glassno.de/3VLKLOH
The Week On-Chain 14, 2024
As the Bitcoin Spot Price consolidates below the new ATH of $73k, the Long-Term Holder cohort has entered their distribution phase, selling to new investors at higher prices. This represents an injection of new capital into the asset class, driving the realized cap up to new heights.
Executive Summary
- Capital continues to flow into Bitcoin, with the Realized Cap rising to a new high of $540B, and seeing rates of capital inflow into the asset now exceeding $79B/month.
- The transfer of wealth from Long-Term Holders back to new demand is accelerating, with over 44% of the network wealth now owned by coins aged less than 3 months old.
- Profit taking continues to dominate investor behavior, with both the Long and Short-Term Holder cohorts taking chips off the table. Overall profit dominance is however shifting towards the Long-Term Holders.
Read more in The Week On-Chain newsletter.
If we index the Bitcoin price performance (black) since the April 2021 ATH (where we argue bear market sentiment set in), we can see a remarkable similarity to the prior cycle (blue).
By both duration and distance from the April 2021 peak, the market is in a near identical spot to December 2020 relative to the 2018-21 cycle.
Discover more in the latest Week On-Chain below👇
https://glassno.de/496ld1S
Following the break above the ATH, the Bitcoin market had reached a statistically significant level with respect to Unrealized profit held within the supply.
Past instances have historically been points of interest, where the market finds a degree of resistance, and some investors start to take profits and chips off the table.
Discover more in the latest Week On-Chain below👇
https://glassno.de/496ld1S
In this week's Glassnode Clips, we analyze Bull Market Corrections:
- Recent bull markets have experienced shallower corrections than earlier ones, indicating strong buy-side pressure and limited selling.
- The market's spot-driven nature and ETF contributions in the current cycle mirror those of the 2016-2017 cycle, aiding in understanding present market behavior.
- Events like the halving influence investor actions, but despite potential sell-offs, the market has demonstrated resilience with shallow corrections, pointing to continued demand and support.
Discover more in the latest Glassnode Clips below 👇
https://www.youtube.com/watch?v=JmDOJlzSKnc&t=2s
Roll-up solutions have gained popularity over the last 2 years, with the two major scaling solutions, Arbitrum and Optimism, seeing usage increase by up to 150k, and 100k daily active addresses, respectively.
Meanwhile, Ethereum's mainnet still has the largest activity count, with more than 400k active addresses per day.
Discover more in the latest Week On-Chain below 👇
https://glassno.de/4cp3cii
In this week's Glassnode Clips, we analyse Realized Cap HODL Waves:
- Realized Cap HODL Waves offer insights into market cyclical behavior by focusing on the USD value of Bitcoin's age bands, providing an economically relevant perspective beyond traditional HODL Waves.
- This method excludes less economically meaningful data, such as stationary old coins, to emphasize the supply actively involved in market dynamics.
- Realized Cap HODL Waves uncover wealth transfer patterns from long-term holders to new buyers across market cycles, showcasing shifts in the economically active Bitcoin supply.
Discover more in the latest Glassnode Clips below 👇
https://www.youtube.com/watch?v=KGZmZQMs4qE
We're offering a status update on our Bitcoin Risk Assessment Framework, a tool for discretionary traders to gauge market sentiment and underlying risk.
Want to discover all the metrics in our Risk Assessment Dashboard? https://glassno.de/48c6bXT
The Week On-Chain 11, 2024
Bitcoin has broken to its fourth cycle all-time-high, rallying above $72k, and pushing sentiment one step closer to Euphoria. The classic wealth transfer from the HODLer cohort to speculators is now well underway, with significant upticks in spot profit taking, and demand for futures leverage.
Executive Summary
- Bitcoin has broken to a new ATH of $72k relative to the US Dollar, entering price discovery, and pushing investor sentiment closer to Euphoria.
- Numerous metrics indicate a striking similarity to past ATH breaks, where a wealth transfer from old HODLers to new investors and speculators is well underway.
- Realized profit metrics and futures funding rates have also spiked to significantly positive levels, suggesting elevated profit taking and demand for long side leverage.
Read more in The Week On-Chain newsletter and watch our latest video analysis report.
In this week's Glassnode Clips, we analyse Bitcoin's Quarterly, Monthly and Weekly Price Performance:
- Simultaneous gains exceeding 20% in quarterly, monthly, and weekly performance metrics are rare, typically marking euphoric market stages observed in significant uptrends like 2019 and 2021.
- Recent days with all three metrics surpassing the 20% gain threshold suggest the market is entering a euphoric phase, especially as it approaches previous all-time highs.
- Surpassing all-time highs usually attracts widespread attention, potentially expanding the investor base, especially with new factors like ETFs influencing the market.
Discover more in the latest Glassnode Clips below 👇
https://www.youtube.com/watch?v=GXmBvPTi3Cs
During the last two bull markets, the aggregate share of Bitcoin wealth aged less than 6-months old reached between 84% and 95%, indicating a saturation of newer holders.
This metric has increased dramatically since early 2023, rising from 20% on 1-Jan-2023 to 47% today. This suggests that the capital held within the Bitcoin holder base is roughly balanced between long-term holders and new demand.
Discover more in the latest Week On-Chain below👇
https://glassno.de/43OJxEt
If we compare the Bitcoin ATH break in prior cycles, it could be argued that current Euphoria phase (market in price discovery) is still relatively young.
Previous Euphoria phases have seen numerous price drawdowns exceeding -10%, with the majority being much deeper, with 25%+ being commonplace. The current market has seen just two ~10%+ corrections since the ATH was broken.
Discover more in the latest Week On-Chain below 👇
https://glassno.de/43OJxEt
This month's Finance Bridge examines the role of ETF inflows and wealth transitions in Bitcoin's rise, along with the ramifications of Ethereum's upgrade. The analysis includes a look at market momentum indicators and speculative trends as the Bitcoin halving approaches. A crucial read for finance professionals and institutional investors in the digital asset market.
Read the full article here: https://glassno.de/3VR40qg
We can employ the fundamental Realized Cap metric to track the cumulative USD liquidity ‘stored’ within the Bitcoin asset class.
Currently, the Realized Cap resides at a new ATH value of $540B, and is increasing at an unprecedented rate of over $79B/month.
Discover more in the latest Week On-Chain below 👇
https://glassno.de/3VLKLOH
Assessing the Bitcoin Long-Term Holders, we can see their Realized Profit / Loss Ratio has gone exponential and vertical.
This a result of there being no LTHs in Loss when the market has only recently broken above the previous cycles ATH, and is further fuelled by a significant uptick in LTH profit taking.
Discover more in the latest Week On-Chain below 👇
https://glassno.de/3VLKLOH
If we segregate the Bitcoin Realized Cap for coin-ages younger than 3 months, we can see a sharp increase over recent months, with these newer investors now owning ~44% of the aggregate network wealth.
This uptick in younger coins is a direct result of Long-Term Holders spending their coins at higher prices to satisfy the wave of inflowing demand.
Discover more in the latest Week On-Chain below 👇
https://glassno.de/3VLKLOH
In this week's Glassnode Clips, we analyze Supply Cluster Heatmap:
- The heatmap shows older coins activate at all-time high breaks, indicating long-term holders distribute as newer coins enter the market.
- All-time high breaks trigger long-term holders to shift from accumulation to distribution, marking the euphoria phase with more supply in circulation.
- Long-term holder activity at all-time high breaks consistently signals key market phases, from the start of euphoria to potential peaks and turning points.
Discover more in the latest Glassnode Clips below 👇
https://www.youtube.com/watch?v=_CQd3xdud20
With the Bitcoin halving around 24 days away, we explore how the behavior of Long-Term Holders—a cohort of mature investors holding a significant majority of the supply—affects Bitcoin's macro supply and market dynamics.
Find out more below: 👇
https://glassno.de/49cZ5TG
The Week On-Chain 13, 2024
As the Bitcoin market hits resistance at a new ATH of $73k, the Long-Term Holder cohort have ramped up their overall distribution pressure. The market is currently seeing over $2.6B/day in realized profit, as investors start to take chips off the table.
Executive Summary
- Bitcoin prices have pulled back -15.4% from the new $73k ATH, reaching as low as $61k. This price action aligns very closely with the prior 2018-21 cycle.
- Several on-chain indicators have flagged an uptick in profit taking events, with over $2.6B in realized profit taken as the market reached resistance.
- The overall Bitcoin market has several similarities to prior ATH breakouts, specifically related to distribution pressure by the Long-Term Holder cohort.
Read more in The Week On-Chain newsletter and watch our latest video analysis report.
With the Bitcoin halving about 30 days away, our latest article examines its implications for directional traders, particularly considering its interplay with the new market dynamics introduced by the ETFs.
Discover how to adapt your strategies for the upcoming market changes: 👇
https://glassno.de/49cZ5TG
The Week On-Chain 12, 2024
The Dencun upgrade has activated successfully, introducing a new architecture for Layer-2 solutions to anchor into the mainchain. It also introduces modifications to the staking pool. Both could impact Ethereum's monetary policy.
Executive Summary
- The Dencun Upgrade on Ethereum introduces new data storage capacities, aimed at reducing fee costs of its Layer-2 scaling solutions.
- The upgrade also implements a fixed limit for entering validators to manage the growth of the validator set and maintain efficient node communication.
- This change could influence Ethereum's monetary policy by reducing the rate of new Ethereum issuance. This could potentially lead to a decrease in the Ethereum supply.
Read more in The Week On-Chain newsletter and watch our latest video analysis report.
The transfer of wealth from mature investors to new demand is in effect, with the proportion of wealth held by 'Young coins' (moved within the last 3-months), increasing by 138% since October 2023.
This reflects a net expenditure by longer-term investors who had previously held their coins for at least 3-months.
Discover more in the latest Week On-Chain below 👇
glassno.de/3V8bvbY
The Bitcoin Realized Cap is currently increasing at a rate of $54B/month, approaching levels last seen during the run-up in early 2021.
This highlights just how significant the capital inflows have been for Bitcoin, driven in part by the tremendous success and demand for the new US ETF products.
Discover more in the latest Week On-Chain below👇
https://glassno.de/3V8bvbY
We're launching the first video walkthrough for our Bitcoin Momentum Traders Checklist series. Aimed at maximizing value for our Glassnode professional and institutional clients, each checklist will be explored in its own video.
Today's video analyses focuses on the Supply Dynamics Checklist and shows how tracking changes in supply can help spot major price trends ahead of time. https://www.youtube.com/watch?v=q0i_XAWwa5o
Make sure to download the checklist here: https://glassno.de/download-checklist
One way to gauge the profitability of the market for any specific cohorts of Bitcoin investors is to leverage their on-chain cost basis and compare it with the spot price.
🔵 Long-Term Holders = $20.7K
🔴 Short-Term Holders = $45.8K
🟠Market Realized Price = $24.4K
With price trading at $68k, the long-term holders are, on average, sitting on an unrealized profit of ~228%.
Discover more in the latest Week On-Chain below 👇
https://glassno.de/3wD4W78