Glassnode, a blockchain analysis firm published a report outlining Bitcoin’s current fall below the 200-day moving average (MA). The report titled “A Bear of Historic Proportions” also pointed out a negative deviation between realized price and net realized losses. The report says that this makes 2022 the worst performing year in Bitcoin’s history.
The report points out several factors which turned the market conditions bearish. Most Bitcoin traders continue to sell their investments below their buying price.
Currently, down 70% from its November 2021 high, Bitcoin now trades at $21,399.80
“In the midst of this, Bitcoin and Ethereum have both traded below their previous cycle ATHs which is a first in history.”
The first clear indication of a bear market is the point at which the spot price of Bitcoin (BTC) falls below the 200-day MA. To demonstrate how rare the price levels are, Glassnode showed that the 2022 bear market has Bitcoin falling 50% from the 200-day MA level.
Glassnode additionally showed that falling below 0.5 the Mayer Multiple (MM) is an incredibly rare event that hasn’t occurred since 2015. The MM factors in price changes above and below the 200-day MA to show overbought or oversold conditions.
“For the first time in history, the 2021-22 cycle has recorded a lower MM value (0.487) than the previous cycle’s low (0.511).”
Trades have been increasingly forced to sell their coins at a loss. The current market condition is that the spot price is falling below the realized price. The analytics firm says that these prices are “typical of bear markets and market capitulations.”
Spot prices trading below the realized price is an uncommon situation. Glassnode says that in the last six years this is only the third time this has happened and technically the fifth time since Bitcoin’s launch in 2009.
The rarity of this occasion was displayed in Glassnode’s model which demonstrated how 13.9% of all Bitcoin trading days have seen spot prices dip below realized prices.
“Spot prices are currently trading at an 11.3% discount to the realized price, signifying that the average market participant is now underwater on their position.”
With an end goal to rescue plunging profits, Bitcoin miners are turning into sellers in the wake of seeing the price of the bellwether token more than halve in 2022. This previous month, miners moved 23,000 Bitcoin to exchanges, addressing the highest monthly stream since May 2021, when China started a crackdown on its domestic crypto industry.