2022 Bear Market Historically the Worst: Glassnode

UTC by Tolu Ajiboye · 3 min read
2022 Bear Market Historically the Worst: Glassnode
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Glassnode has analysed the 2022 bear market and has concluded that it is the worst bear market in crypto’s history.

The 2022 bear market has been the worst ever recorded, according to blockchain data provider and on-chain market analyst Glassnode. In a Saturday report titled “A Bear of Historic Proportions,” Glassnode attempts to provide details on why 2022’s bear market is the worst on record.

The report suggests a few reasons for the unsavory bear market situation, including leading crypto Bitcoin (BTC) dipping below the 200-day moving average (MA). In addition, Glassnode cited other parameters such as negative deviation from realized price and net realized losses as causes. The report read:

“In the midst of this, Bitcoin and Ethereum have both traded below their previous cycle ATHs which is a first in history.”

In addition, Glassnode also went on to explain that:

“This has subsequently plunged a great proportion of the market into unrealized loss, with all 2021-22 investors now underwater. As this financial pain sets in, a growing proportion of investors are liquidating their holdings, locking in record realized losses.”

To demonstrate this rarity, Glassnode showed that BTC plunged below half the 200-day MA level during the 2022 bear market. In addition, the blockchain data provider emphasized on MM value. Its said that only 84 of 4160 trading days (2%) have recorded an MM value below 0.5.

The MM value is a metric that shows whether an asset is overbought or undersold. Calculating MM considers changes in pricing below and above the 200-day moving average.

Insight into Given 2022 Worst Bear Market Analysis

The Glassnode report specifies that former bear markets were established with BTC drawdowns of -75% to -84% from record highs. In addition, according to the on-chain market analyst, this trend lasted 260 days in 2019/20, and 410 days in 2015. Based on past figures, the report concluded about the bear market as follows:

“With the current drawdown reaching -73.3% below the Nov-2021 ATH, and taking a duration between 227-days and 435-days, this bear market is now firmly within historical norms and magnitude.”

The platform’s report further confirms the current market severity by outlining the dip in spot price below the realized price. According to Glassnode, this unsavory development has led to an increasing number of traders selling their coins at a loss. However, the on-chain data analyst also states that the cascading pattern is salient among bear markets and market capitulations.

To put the current spot market situation in perspective, Glassnode states that this is just the third occurrence in the last six years. The data platform also specified that spot prices trading below realized prices has only happened five times since Bitcoin launched in 2009.

Bitcoin is currently changing hands at $21,311.63, representing a massive 70% drawdown from its November 2021 high.

Glassnode on Ethereum

The report also provided some insight into Ethereum. Glassnode said that Ethereum has witnessed its “two largest statistical capital destruction events “in history over the lasts 6 months. It specified that investors who bought Ether between 2021 and 2022 are “holding an unrealized loss.”

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