More than half of bitcoin (BTC) addresses remain in the green, which raises questions about the seriousness of the current “bear market”.
Data from on-chain analytics company Glassnode confirms that, As of June 20, 56.2% of addresses were still worth more in US dollar terms than when their currencies entered them.
Yield does not match previous market lows
When the BTC/USD pair fell to a 19-month low of $17,600 over the weekend, analysts began to prepare for what they assume will be a decline of up to 84.5% from its historical highs.
This year there is a sense of confusion because those highs are not “high enough” compared to the all-time highs of bull markets.
Thus, the subsequent drop has caught many by surprise, even though it has so far not matched previous bear markets.
Figures from Glassnode support this idea. BTC price lows have tended to coincide with less than half of the directions remaining in profit, and as such, the current downtrend still has some way to go if it is to fit historical patterns.
In March 2020, for example, profitable addresses fell to 41%, and before that, the 2018 bear market also saw a drop below the 50% mark.
However, panic may already be setting in. As Cointelegraph reported, the losses made have been increasing among users who do not want to continue taking care of their funds.
June 13 saw the largest on-chain losses in bitcoin history, reaching $4.76 billion in a single 24-hour period.
The market is “approaching” the big short
On the subject of how many sells need to occur before the market reverses, Dylan LeClair, senior analyst at UTXO Management, noted a split between retail and derivatives traders.
As he argued this week, in times past retailers have sold first, with speculators coming to finish the process by shorting their BTC to abnormally low levels.
“It’s getting closer”, summarizes part of a tweet along with a graph that shows the increase in costs for “shorters” as price action declines in recent days.
Bottom is in when the derivatives market is shorting $BTC into the dirt after the brunt of the spot selling has taken place.
Getting closer… pic.twitter.com/HfDDflu06D
— Dylan LeClair (@DylanLeClair_) June 20, 2022
Bottoms are reached when the derivatives market is shorting your BTC after most of the spot selling has occurred.
It gets closer every time…
LeClair added that more liquidations are likely to be needed in the DeFi space before a definitive bottom can be put up.
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