Bitcoin Crash Unlike LUNA & FTX Collapses, Says Glassnode: Here’s Why
On-chain analytics agency Glassnode has defined how the most recent Bitcoin selloff is totally different from the LUNA and FTX crashes of 2022.
Bitcoin Supply In Profit Trend Is Structurally Different For The Latest Crash
In a brand new post on X, Glassnode has mentioned how the current bearish motion in BTC compares in opposition to a few of the previous crashes. The analytics agency has used the Percent Supply in Profit to make the comparability. This on-chain indicator measures, as its identify suggests, the proportion of the entire Bitcoin circulating provide that’s sitting on some web unrealized achieve proper now.
The metric works by going by the transaction historical past of every token in circulation to see what worth it was final transferred or bought at. If this earlier transaction worth was lower than the most recent spot worth for any token, then it might be thought-about to be at the moment sitting on some revenue.
The Percent Supply in Profit provides up all cash of this sort and determines what proportion of the provision they make up. Another indicator known as the Percent Supply in Loss tracks the tokens of the other sort. If considered one of these indicators is understood, the opposite can merely be calculated by subtracting it from 100, because the whole BTC provide should add as much as 100%.
Now, right here is the chart shared by Glassnode that exhibits the development within the Bitcoin Percent Supply in Profit over the previous couple of years:
As is seen within the above graph, the Bitcoin Percent Supply in Profit hit the 100% mark earlier within the month when the cryptocurrency’s worth set its new all-time high (ATH). When the sharp selloff on the finish of final week began, the indicator’s worth was nonetheless effectively over the 90% mark, that means the overwhelming majority of buyers had been within the inexperienced. As such, the crash was extra profit-driven, with losses principally coming from the highest patrons.
During a few of the massive crashes of the 2022 bear market, nevertheless, the market circumstances had been fairly totally different. In the LUNA and FTX collapses, the Percent Supply in Profit sat below 65%.
In the chart, Glassnode has additionally highlighted the information of one other metric: the Net Realized Profit/Loss, measuring whether or not profit-taking or loss-taking is dominant on the BTC community. From this indicator, it’s obvious that the aforementioned crashes noticed deep adverse values, implying a broad capitulation occasion happened.
The 3AC collapse occurred alongside the next Percent Supply in Profit, however it additionally witnessed a notable spike in loss-taking. Based on this, Glassnode concludes that the most recent Bitcoin crash was “a structurally totally different, leverage-driven occasion.”
BTC Price
At the time of writing, Bitcoin is buying and selling round $110,400, down greater than 11% during the last week.
