Analysts Say Crypto Markets Have Not Yet Bottomed Out, More 'Time Pain' Ahead

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.

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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.

“This indicates that whilst many bottom formation signals are in place, the market still requires an element of duration and time pain to establish a resilient bottom. Bitcoin investors are not out of the woods yet,” the analysts state.