Glassnode

The Week On-Chain 05, 2024
The Bitcoin market continues to show resilience, recovering from the initial sell-the-news drawdown following ETF approvals. In particular, the market is working through the significant supply overhead created by investors rebalancing capital out of the GBTC product since its conversion.

Executive Summary
- Bitcoin price performance since the 2022 lows shows striking similarity to prior cycles, albeit recovering somewhat slower, but in a more resilient manner.
- Despite a modest uptick in older coin spending following ETF approvals, the majority of long-term Bitcoin investors remain unwilling to part with their coins at current prices.
- Network activity remains low in terms of entities, but monetary volume transferred on-chain, and specifically to exchanges remains robust, and resembles prior bull market cycles.

Read more in The Week On-Chain newsletter and watch our latest video analysis report.

Assessing the severity of Bitcoin Bull Market Corrections by cycles, an increased level of resilience can noted across our current cycle.

Currently, the largest drawdown has reached a value of only -20.1%, paling in comparsion to historical precedence.

For further information on Bitcoin Price Performance, please visit our Dashboard: https://glassno.de/40Xt7GQ

In this week's Glassnode Clips, we focus on Long and Short-Term Holder Supply:

- Market trends and investor behaviors are significantly impacted by changes in the balance between long-term and short-term Bitcoin holders.
- The distribution of long-term versus short-term holders serves as a market sentiment indicator, where an increase in short-term holders often aligns with market peaks, signaling new investor influx and potential volatility.
- The current market state, marked by a modest increase in short-term holder supply, suggests it isn't in a robust bull run, and a declining market could indicate insufficient demand, reflecting weaker market strength.

Discover more in the latest Glassnode Clips below 👇
https://www.youtube.com/watch?v=8zECAQxOv1A&t=2s

In our latest Chart of the Week, we discover the significance of the Short-Term Holder Supply in Loss metric.

This cyclical indicator aids traders employing momentum strategies in the Bitcoin market. Gain insights into its role in distinguishing between market corrections and potential peaks, offering valuable information for strategic decision-making. https://www.youtube.com/watch?v=Mjcde_26JSA

Last night, David Duong, CFA, Head of Research at Coinbase Institutional, and our Lead Analyst, James Check, hosted an in-depth webinar which highlighted some key insights from our Q1 Guide to Crypto Markets.

A big thank you to the many institutional investors who attended the live webinar and asked amazing questions. If you missed it, you can access the recording here: https://get.glassnode.com/2024-crypto-guide-coinbase/

Get in touch here: https://glassnode.com/institutions

The Week On-chain 04 , 2024
The approval of a suite of new Bitcoin ETFs appears to have become a classic sell-the-news event, triggering BTC prices to drop by -19%. This makes for an ideal opportunity to assess how investor profitability has changed over recent weeks.

Executive Summary
- Supply in Profit/Loss as an ideal toolkit to monitor profitability.
- Breakdowns of supply into Long and Short-Term Holder cohorts.
- Identifying divergences using simple statistical bands and levels.

Read more in The Week On-Chain newsletter and watch our latest video analysis report.

With the Bitcoin ETF becoming a classic sell-the-news event, we explore the market's risk appetite for tokens further out on the risk curve.

There are some indicators alluding to Ethereum outperformance, as well as interesting divergences in altcoin price action relative to the majors.

Discover more in the latest Week On-Chain👇
https://glassno.de/3Hszc6P

The Shrimp Cohort [<1 BTC] continues to aggressively accumulate Bitcoin
at a rate of +23.7K BTC / Month, bringing the total Shrimp supply to a value of 1.38M BTC.

For further information regarding Entity Accumulation and Distribution, visit our Dashboard: https://glassno.de/3g3mt0i

Or read our deep dive report exploring the supply distribution of Bitcoin, breaking down the supply by wallet size, and exploring how coins disperse over time: https://insights.glassnode.com/bitcoin-supply-distribution-revisited/

In this week's Glassnode Clips, we focus on ETFs:

- GBTC remains a key player in the ETF market, holding about 617,000 BTC. It has recently reduced its fee, shifting from a premium to a 50% discount, which impacts investor decisions.
- The ETFs saw a $7.6 billion trading volume in two days, with GBTC alone contributing $4.16 billion. Investors are weighing the trade-off between GBTC's high liquidity and its fees against other ETFs with lower fees.
- The market now features around 10 different ETF products, each with its own characteristics. This diversity presents a complex scenario for analysts and investors, requiring careful observation of the market's evolution.

Discover more in the latest Glassnode Clips below 👇
https://www.youtube.com/watch?v=Wzwcm_mg7zU&t=1s

In our first Chart of the Week of 2024, we explore the Value Days Destroyed metric.

The introduction of spot Bitcoin ETFs, which turned out to be a "sell the news" event, prompts us to question if this marks the initial hint of a reversal in the positive trend we've witnessed over the past year. Value Days Destroyed, an indicator focused on Bitcoin's smart money, might just hold the answers. https://www.youtube.com/watch?v=n9T5zD09XTI

Whilst the fourth halving is pre-determined to occur at block-height 840,000, the exact date is unknown due to the natural variability and probabilistic nature of mining blocks.

Our best estimate given the current average block interval is that the halving is now 100-days away.

Whilst the fourth halving is pre-determined to occur at block-height 840,000, the exact date is unknown due to the natural variability and probabilistic nature of mining blocks.

Our best estimate given the current average block interval is that the halving is now 100-days away.

If you'd like to learn more about how the halving may affect the supply and demand dynamics of Bitcoin and, ultimately, its price action in the coming months, this comprehensive analysis Glassnode produced back in November is your go-to resource: https://insights.glassnode.com/the-week-onchain-week-46-2023/

Attention institutional investors: On January 24th we will be hosting a live Webinar discussing the metrics that matter the most in Q1.

Join Glassnode's Lead Analyst, James Check, and David Duong, Head of Research at Coinbase Institutional, to learn:

- If digital assets correlate with traditional assets
- Where we are in the current cycle
- How adding crypto can affect portfolio performance

Seats are limited so sign up today: https://zoom.us/webinar/register/WN_32Egmw1MRzegOHK6ScgQaA#/registration

The Week On-chain 03 , 2024
2024 has opened with a roller-coaster ride for Bitcoin, as ten new spot ETFs begin trading in US markets. The event was historic and chaotic, with BTC prices setting both new multi-year highs, and YTD lows. Bitcoin has welcomed traditional finance into it's world.

Executive Summary
- The successful SEC approval of ten new spot BTC ETF products set the scene for a characteristically chaotic week for Bitcoin investors.
- BTC prices set new multi-year highs, followed by YTD lows, as the market sold off -18% over the weekend. This was driven by both derivatives leverage and spot profit taking.
- Several indicators reached levels where past cycles found meaningful resistance, and was highlighted by ~75K BTC being spent by Long-Term Holders taking profits.

Read more in The Week On-Chain newsletter and watch our latest video analysis report.

Last week, in collaboration with Coinbase Institutional, we released the Q1 2024 Guide To Crypto Markets.

Thousands of downloads & acclaim for the 44-page guide on Bitcoin, Ethereum, Stablecoins, Derivatives, and portfolio strategies.

Here’s a quick recap of what’s making waves:

- Changing Correlations in Crypto: Highlights 2023 as the year digital assets, particularly Bitcoin, showed low correlations with traditional assets, enhancing portfolio diversity.

- Portfolio Analysis (Mar 2018 - Oct 2023): Adding the Coinbase Core Index to a 60/40 portfolio notably improved both absolute and risk-adjusted returns.

Stablecoin Growth: Explores the rise of various stablecoins and their impact on Q4's circulating supply, offering insight into their increasing importance.

You can view our brand new dashboard here: https://studio.glassnode.com/dashboards/8ce2df90-f7fa-4d66-595e-4d81584825ea

Download it now: https://get.glassnode.com/q1-2024-guide-to-crypto-markets/

In this week's Glassnode Clips, we focus on Market Year-to-Date Price Performance in 2023:

- Bitcoin experienced exceptional growth in 2023, with its market cap increasing by 170%, significantly outperforming traditional assets, and its dominance was particularly notable since October.
- Ethereum has lagged behind, evidenced by its ratio to Bitcoin reaching multi-year lows, which indicates that its growth hasn't kept pace with Bitcoin's.
- The wider altcoin sector, excluding Ethereum and stablecoins, has shown a steady performance, which parallels that of Ethereum, in stark contrast to Bitcoin's rapid growth.

Discover more in the latest Glassnode Clips below 👇
https://www.youtube.com/watch?v=ALH1NGilj5I&t=1s

The SEC has greenlit 11 Spot Bitcoin ETFs, marking a significant shift for the Bitcoin market. Let's examine the on-chain impact:

- Hash Rate hit a new peak over 600 EH/s, demonstrating network strength.

- Daily on-chain transactions exceed $5.7B, with exchange flows at $4.6B.

- Futures Open Interest is at $17.6B, with crypto collateral down to 22%.

- Bitcoin's Realized Cap nears an all-time high at $438B, suggesting increased demand.

- Holder Realized Prices indicate new market entrants:

🟠 $22.4K
🔴 $37.5K
🔵 $20.9K

Despite the rising market, HODLing persists as the prevailing strategy. Yet, a rise in Short-Term Holder supply hints at emerging distribution to new investors.

For full analysis, visit: https://x.com/glassnode/status/1745458120338604490?s=20

Yesterday marked the launch of the Q1 2024 Guide to Crypto Markets by Coinbase Institutional & Glassnode, and today we highlight a key piece of analysis from the report:

BTC Monthly Realized Volatility Bands

- Annual Perspective: Bollinger Bands applied over a one-year lookback period to capture a broad view of market trends.

- Volatility Insights: Pinpoints when volatility is notably high or low—identifying periods of significant price expansion/contraction or unusual calm.

These insights are crucial for investors to spot both turbulent periods and times of quiet before potential market movements.

For more insights, download our guide: https://get.glassnode.com/q1-2024-guide-to-crypto-markets/

Also, check out the accompanying dashboard for an interactive experience of the guide's insights: https://studio.glassnode.com/dashboards/8ce2df90-f7fa-4d66-595e-4d81584825ea