Since June, Bitcoin (BTC) – and the final market subsequently – has been in capitulation, aside from a handful of rallies seen in the summertime of this ongoing bear market based on on-chain information offered by Glassnode, and analyzed by CryptoSlate.
Each bull and bear markets reveal on-chain sentiment information, starting from ‘Capitulation’ to ‘Euphoria – Greed. In the height of a bull market, the top is historically indicated when Euphoria grips tightly. On the other hand, Capitulation usually signals the bottom.
Ongoing capitulation
The chart below shows that BTC has firmly sunk into the Capitulation sentiment as the Net Unrealized Profit/Loss (NUPL) on-chain data displays a descent into red territory seen previous only in 2012, 2015, and 2019.
Bitcoin: Decreased circulating supply
The Bitcoin: Percent Supply in Profit (7-day Moving Average) metric shows that currently, only 54% of BTC’s circulating provide was final moved on-chain for revenue. Via the FTX collapse, this metric depicts BTC circulating provide falling beneath 50% – a stage which has solely occurred throughout bear market lows.
Bitcoin: Over or Undervalued?
Evaluation of the MVRV Z-Rating (7-day Transferring Common) metric reveals that we’re already over 170 days beneath the realized price.
Although Bitcoin did go above the realized price as the results of bear market rallies, traditionally earlier bear market days beneath the realized price counsel the potential for additional capitulation.
Earlier Bear Markets:
- 2019-20: 134 days beneath the realized price
- 2015-16: 384 days beneath the realized price
- 2011-12: 215 days beneath the realized price
To summarize all lined metrics on this analysis, the indicators of the market backside analyzed are per different bear market cycles. Nevertheless, in assessing and evaluating this bear market to earlier bear markets, we may simply be beneath the realized price for an additional six months to a 12 months.
With the addition of geopolitical points, macro uncertainty, and headwinds, calling a backside in an unprecedented time akin to this will solely stay hypothesis guided by historic information.