On-chain metrics hint at a bearish outlook for Bitcoin

cointelegraph.com:

Blockchain analytics provider Glassnode has depicted a bearish scenario for Bitcoin as on-chain metrics suggest increased selling pressure is imminent.

In its weekly analytics report on Feb. 21, on-chain metrics firm Glassnode said that Bitcoin bulls “face a number of headwinds,” referring to increasingly bearish network data.

The researchers pointed at the general weakness in mainstream markets alongside wider geopolitical issues as the reason for the current risk-off sentiment for crypto assets.

It added that as the downtrend deepens, “the probability of a more sustained bear market can also be expected to increase.” Bitcoin is currently trading down 47% from its November all-time high and has been down-trending for the past 15 weeks.

A lack of on-chain activity is one of the distinct signals of a bearish Bitcoin market. The number of active addresses or entities is currently at the lower bound of the bear market channel which depicts on-chain activity during periods of sideways or down trending markets, suggesting a decrease in demand and interest.

Glassnode reported that around 219,000 addresses have been emptied over the past month suggesting that it could be the beginning of a period of outflows of users from the network.

It calculated a short-term holder realized price on an aggregate cost basis which worked out at $47,200 meaning that the average loss at current prices is around 22% for those still holding the asset.

There were several other measurements of long and short-term on-chain positions culminating in the conclusion that there is a total of 4.7 million BTC currently underwater. More than half of it, or 54.5% is held by short-term holders (less than 155 days), “whom are statistically more likely to spend it,”