In its latest weekly report, Glassnode draws attention to the current cryptocurrency market conditions, noting striking parallels to the early stages of the 2022 bear market, often referred to as the crypto winter. One of the most significant indicators of market stress is the elevated risk of capitulation among top buyers. According to Glassnode’s supply quantiles cost basis, which examines the cost basis of Bitcoin held by top purchasers, the spot price has dipped below the 0.75 quantile. Currently priced around $96,100, this situation puts more than 25% of Bitcoin supply under water—a condition reminiscent of the early 2022 market downturn.
Adding to the downturn, the total supply of Bitcoin in loss, as measured by a 7-day simple moving average, has reached a concerning figure of 7.1 million coins. This number falls at the high end of the 5 million to 7 million range noted in early 2022, further hinting at an impending market downturn.
Despite the mounting pressures, capital continues to flow into Bitcoin, albeit at a significantly reduced pace. The realized cap net change stands at about $8.69 billion per month, a substantial decline from the summer peak of $64.3 billion per month.
On the off-chain front, investor sentiment appears to be softening. Demand for ETFs has diminished, with the IBIT recording its sixth consecutive week of outflows, marking the longest negative streak since its inception in January 2024. These outflows have totaled over $2.7 billion in redemptions over the past five weeks, indicating waning investor confidence.
Furthermore, activity in the spot market is showing signs of deterioration. Cumulative volume delta (CVD) has rolled over, with Binance’s CVD consistently trending negative. Although the Coinbase premium recently turned positive after a prolonged period in the red, it appears to be rolling over again as overall market sentiment declines.
In the domain of derivatives, data points to a diminishing appetite for risk. Open interest in derivatives contracts has decreased throughout November and into December, reflecting a cautious stance among traders. This reluctance to engage with high-risk investments follows the October 10 liquidation flash crash event. Perpetual funding rates are primarily neutral, with occasional negative prints, while the funding premium has notably cooled, suggesting a shift toward a more balanced and less speculative trading environment.
Lastly, Glassnode notes that traders seem to be avoiding positioning for a significant breakthrough ahead of the upcoming Federal Open Market Committee (FOMC) meeting. The options market exhibits a cautious attitude, as many traders are selling upside options rather than pursuing them aggressively. Earlier this week, put buying was prevalent as Bitcoin approached the $80,000 mark, but as prices stabilized, there was a noticeable shift toward call activity, indicating a calming of investor fears.
