Analysts at Glassnode stated that Bitcoin (CRYPTO: BTC) “remains firmly within bear market territory” based upon supply characteristics and on-chain activity.
What Happened: In the most recent edition of its weekly newsletter taking a look at the crypto market, Glassnode alerted that a duration of greater volatility might be around the corner.
“At the moment, we have implied volatility climbing, and leverage ratios in futures markets approaching overheated levels, particularly across perpetual futures,” checked out the report.
“Market structure such as this has preceded periods of very high volatility, as was seen in May 2021, and Aug 2021, and thus suggests a regime of higher volatility may be around the corner.”
The experts kept in mind that open interest in Bitcoin futures has actually been on a constant climb, presently reaching 1.94% of the BTC market cap. Historically, take advantage of ratios that surpassed 2% of market cap have actually been high-risk durations followed by violent deleveraging.
Metrics such as active addresses, brand-new on-chain entities, and deal counts remain in a comparable zone to the 2019-2020 bearish market healing, observed the experts. However, unlike the previous bear cycle which saw low levels of deal volume, the overall everyday settlement worth continues to trend greater.
“On-chain activity and supply dynamics remain firmly in the bear market territory in magnitude and trend, but are somewhat directionless in their forward bias,” concluded the experts.
“Should evidence of strength appear in the form of accelerating on-chain activity, and increased supply migrating into long-term holder hands it would favoUr the bulls, especially given volatility expectations. Similarly, deterioration would favor the bears.”
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