- The crypto market, led by Bitcoin
, has been relatively quiet. Data shows that the current consolidation reflects slow and steady liquidity, similar to the periods of 2016 and 2019/2020.
- Glassnode’s data compared the realized value from 2020 to 2022 with the current state. Prior to the mentioned periods, Bitcoin experienced significant capital outflows.
- Similar to the realized value, Bitcoin’s seven-day net realized profit/loss was in a similar state as in the first halves of 2019 and 2020.
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Bitcoin is exhibiting movements similar to the periods of 2016 and 2019/2020. What does this mean? Could it be preparation for a bull season?
Bitcoin Price History May Repeat Itself
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For the past few days, the crypto market, led by Bitcoin, has been relatively quiet. According to Glassnode’s on-chain bulletin, the current consolidation reflects slow and steady liquidity, similar to the periods of 2016 and 2019/2020.
One of the aspects explained by the on-chain analytics platform is realized value. Realized value measures Bitcoin’s estimated cost based on the last transaction price. Glassnode’s data compared the realized value from 2020 to 2022 with the current state. Prior to the mentioned periods, Bitcoin initially experienced significant capital outflows. However, the recovery began in March 2020, and in 2021, a bull market occurred, resulting in a 348% increase in realized value.
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Similarly to the events of 2020, Bitcoin was experiencing a recovery of capital inflow after a major downturn in 2022. Therefore, there was a possibility that another bull market was not too far away. However, Glassnode stated the following:
“In previous cycles, ATH recoveries in realized value took place between 95 and 239 days, and the ongoing recovery has occurred at a similar pace so far.”
Another point indicating tight trading conditions for BTC was the Bollinger Bands (BB) range. This range uses default periods and standard deviations to determine whether prices are relatively high or low.
With a difference of 4.2% between the upper band and the lower band, Glassnode noted that BTC was experiencing extreme squeezing. Additionally, this indicates that Bitcoin has been in its quietest market since January.
This could be a preparation!
Similar to the realized value, Bitcoin’s seven-day net realized profit/loss was in a similar state as in the first halves of 2019 and 2020. The on-chain indicator shows whether the market is in profit or loss. When the net realized profit/loss is below zero, the market is in a loss. Values greater than zero indicate a profitable market.
According to Glassnode’s analysis, this metric placed the market in a profitable position. However, the main similarity was the pattern following the bull market between 2020 and 2021. Therefore, there is a chance that Bitcoin may want to replicate its form from that period.
Looking at the short-term and long-term SOPR ratio, on-chain data showed that the spending of each group was close. However, Short-Term Holders (STH) still had a slight dominance. This was a similar trend to the metric in March 2020. Therefore, STH may soon be less profitable than their long-term counterparts.