Long-term holders and miners are under remarkable pressure to surrender amid bearish cryptocurrency market sentiments and activity levels of small and large entities suggest the market has not yet formed a confident bottom and still has work to do, according to blockchain analysis firm Glassnode.
Glassnode states that the volume of supply currently at a loss has reached 44.7%, of which a majority is carried by long-term holders, however, this remains at a less severe level compared to previous bear cycles.
“Overall, the fingerprint of a widespread capitulation, and extreme financial stress is certainly in place. However, there may still be a combination of both time pain (duration), and perhaps further downside risk to fully test investor resolve, and enable the market to establish a resilient bottom,” the analysts state.
The dominance of long-term holders (LTHs) tends to increase over time, as fair-weather speculators are flushed from cryptos like Bitcoin BTC/USD and Ethereum ETH/USD.
“For a bear market to reach an ultimate floor, the share of coins held at a loss should transfer primarily to those who are the least sensitive to price, and with the highest conviction,” according to Glassnode analysts.
In previous bear markets, the supply held by LTHs reached over 34%, while the proportion held by short-term holders (STHs) went below 4%. In comparison, currently, STHs still hold 16.2% of the supply at a loss.
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