23rd February 2022 > > Glassnode analytics.

Market Snap (at time of writing)

Market Wrap

Big move in perpetual futures funding rates as the leveraged children react after the event of Russia’s invasion of Ukraine. Risk assets holding up well, which is a shame, as I was hoping for a large buying opportunity.

Curious Cryptos’ Commentary – Glassnode analytics

Glassnode, a blockchain analytics company, issue frequent reports, graphs, and commentary, that give some great insights into activity on the chain, and by whom:

https://glassnode.com/

It can be a bit of a rabbit hole, so put aside a whole weekend if you want to get serious about it.

Against the backdrop of a macro-environment that is not particularly friendly to risk assets (war, inflation, the impending ending of state sponsored market manipulation on a scale never seen before aka quantitative easing) Glassnode offers up some further warning signs:

https://insights.glassnode.com/the-week-onchain-week-08-2022/

The first of these is the amount of on-chain activity, which is “… languishing at the lower-bound of the bear market channel”.

Meanwhile there has been a net decline in non-zero wallet balances over the last 30 days, indicating that some investors have emptied some wallets entirely. In total, 219,000 wallets have been emptied of their entire BTC holding in the last month.

Recent downwards price action means that a quarter of all wallets are now underwater as compared to purchase price, with 11% having a cost base of between $34k and $45k. These recent retail entrants have historically been the weakest of hands and are likely to sell into continuing weakness.

A similar metric looks at short-term holders (STH) to long-term holders (LTH). Statistically, the longer a coin remains unspent, the more likely it is to remain unspent, regardless of any price action. I can back this up with my own experience – I have never sold any BTC since 2015, except for one exploratory purchase on the dark web purely for educational purposes you understand.

It seems that the STH base has a high concentration of supply priced between $42k and $50k, holders that again are weak hands, who likely to crumble if losses continue to mount.

Taken in the round, this latest update from Glassnode about on-chain analytics does not paint a particularly rosy picture.