Glassnode’s most recent weekly report draws parallels between the current market situation and the beginning phases of the 2022 bear market, often referred to as crypto winter.
The initial indicator pointing to stress is the increased risk of top buyer capitulation. Glassnode’s supply quantiles cost basis, which monitors the cost basis of supply held by leading buyers, reveals that since mid-November the spot price has dipped below the 0.75 quantile and is trading close to $96,100. This means over 25% of BTC supply is currently underwater, a similar signal that preceded the start of the 2022 bear market.
At the same time, the total supply in loss on a 7-day simple moving average has surged to 7.1 million bitcoin, which is the upper limit of the 5 million to 7 million range seen in early 2022.
Despite these challenges, capital continues to flow into bitcoin based on a realized cap net change, which stands at around $8.69 billion per month. However, this figure is significantly lower than the summer peak of $64.3 billion per month, as reported by Glassnode.
Off-chain trends also indicate a further softening from investors. ETF demand is increasingly weak, with IBIT reporting a sixth consecutive week of outflows, marking its longest negative streak since its January 2024 launch. The outflows have now surpassed $2.7 billion in redemptions over the past five weeks.
Spot market activity is deteriorating as well. The cumulative volume delta (CVD) has rolled over, with Binance CVD showing a consistently negative trend, according to Glassnode. The Coinbase premium appears poised to roll over again, having recently flipped positive after a long stretch in the red.
Derivatives data supports a decline in risk appetite, as open interest has decreased throughout November into December, suggesting a diminished willingness to take on risk, especially following the liquidity flash crash event on October 10. Perpetual funding rates are largely neutral, with brief spells of negative readings, and the funding premium has notably cooled, indicating a more balanced and less speculative environment.
Glassnode highlights that traders are not gearing up for a robust breakout leading up to next week’s FOMC meeting. The firm observes a cautious attitude in the options market, where traders are selling upside instead of pursuing it. Earlier in the week, put buying took precedence as bitcoin neared $80,000. However, as the price stabilized, flows shifted toward call activity as investor concerns eased.
