Glassnode Experts: “We See a Strong Bearish Trend in the Bitcoin Market”

Amid a global decline in the value of global assets and stocks, the Bitcoin (BTC) rate has suffered its biggest drop in the current cycle, reaching $48,700, Glassnode researchers said. The price drop was accompanied by a sharp decrease in open interest in the futures market by 11% in a day.

According to experts, the sharp decline in the markets in early August 2024 was caused by global economic tensions and risks. Bitcoin has fallen by 32% from its all-time high. The Mayer Multiple, an indicator showing the ratio of the current price to the 200-day moving average, reached 0.88, which was the lowest level since the FTX crash in late 2022. This indicates a strong bearish trend.

In the wake of these events, analysts noted that short-term BTC holders have suffered significant unrealized losses. They have also reached their highest level since the bankruptcy of the FTX exchange. Only 7% of assets owned by short-term holders are in a profitable position, which is comparable to the August 2023 sell-off.

The average active investor purchase price of $51,200 has proven to be a critical support point for the market. A re-break of the level could require a significant reassessment of the bull market structure and indicate that a significant portion of traders are now at a loss.

The investor panic resulted in $1.38 billion in recorded losses, the 13th-largest event in history based on dollar value, with short-term holders accounting for 97% of the losses.

“There was significant long unwinding in derivatives markets, with liquidations totaling $365 million. This resulted in an 11% decline in open interest (OI) on the day, indicating a full reset in futures markets and increasing the importance of blockchain data for analyzing the recovery in the coming weeks,” the experts wrote in the report.