In its ‘week on-chain’ report on Oct. 31, Glassnode, an analytics provider, compared the current Bitcoin market cycle bottom and those from previous bear markets.
Glassnode stated that the market was “hammering out a Bitcoin bottom, with almost textbook resemblance to prior cycle lows.”
It reported that, as in previous cycles, the Bitcoin bear market had inflicted severe financial loss on investors and various metrics, such as Realized Price and Mayer Multiples, to determine cycle lows and a bottom discovery phase.
Realized price, or the average acquisition price per coin for the wider market, is currently at $21,105, according to Woo Charts. When spot prices trade below the realized price, “the aggregate market can be considered to be in unrealized loss,” noted Glassnode. This has been the case for the best part of the past four months.
The Mayer Multiple, which is the ratio between the price and the 200-day simple moving average (SMA), helps to identify oversold or bought conditions. Values below 0.6, where it currently is, signify cyclical oversold markets.
These conditions played out in both the 2014-15 bear market and that of 2018-19 though not for as long as the current duration. This sideways channel’s upper and lower bounds tend to be around the realized price to the balanced price, with the market value somewhere in between.
It noted that this condition of “financial stress” continues into the Bitcoin bull market transition, so there could be a lot longer to go in this bear cycle.
Glassnode concluded that markets had yet to see an influx of new demand or a transition to bullish conditions, but “there does appear to be seeds planted in the ground.”