Bitcoin Bear Market Would Be Record Shallow If $60,000 Was The Low: Glassnode

Glassnode has pointed out how this Bitcoin bear market has so far seen a peak Unrealized Loss significantly lower than previous cycles.

Below is the chart shared by Glassnode that shows the trend in the metric for BTC over the last few cycles.

As is visible in the graph, the Bitcoin Relative Unrealized Loss shot up to a notable level alongside the price plunge in early February, indicating that pain among investors saw a sharp uptick. With the recovery that has followed since then, however, the indicator’s value has gone down.

Today, the Relative Unrealized Loss for the network stands at approximately 8%. The report described this decline in the metric as “a transition that shifts the prevailing sentiment from fear toward uncertainty rather than capitulation.”

Earlier, when the indicator had spiked, its value reached a high of 25%. This means that the February crash had meant that investor losses ballooned to 25% of the entire market cap of the cryptocurrency. This is a notable amount on its own, but a quick look at the chart shows that the level is in fact significantly lower than highs seen during previous bear markets.

At present, it’s unclear which stage the current bear market is inside right now. It’s possible that the fact that the Relative Unrealized Loss hasn’t touched prior peaks yet points to the drawdown not being over. It’s also a possibility, though, that the current cycle is simply going to be different from the previous ones. Glassnode noted:

If $60k proves to have been the cycle low, this bear market would stand as the shallowest on record, one that registered fear but stopped well short of the broad capitulation that has historically marked durable cycle bottoms.

Another on-chain indicator that suggests improvement in market conditions is the Realized Cap, which basically measures the total amount of capital that the investors as a whole have put into Bitcoin.

Recently, however, the indicator has recovered back into the green zone, implying capital is once again flowing into Bitcoin. Glassnode explained, though:

The current reading, while encouraging, remains significantly below that threshold, suggesting the capital inflow underpinning this recovery lacks the conviction seen at comparable inflection points in the prior cycle.

Bitcoin has been stuck in sideways movement recently as its price is still trading around $81,300.