In its ‘Week on-chain’ report on Nov. 21, blockchain analytics firm Glassnode reported that recent market weakness has “shaken the confidence of Bitcoin holders.”
It measured aggregate increases in the Mean Inflow Volume to exchanges to determine that more whales are now underwater. The report noted that the average deposit size across all major exchanges increases in dollar terms as a cycle bottom is formed.
The trend has been in effect since May, and it mirrors that of the 2018/19 bear market cycle.
“This indicates that entities such as whales, institutions, and trading firms have had a larger dominance across exchange deposits.”
In the wake of the FTX fallout, confidence of both #Bitcoin Whales, and Long-Term holders appears shaken
Read our latest analysishttps://t.co/K84hMlG2mX
— glassnode (@glassnode) November 21, 2022
Old Hands Weakening
In the depths of the previous bear market, Bitcoin prices were 84% down from their all-time high. It took just under a year for the asset to crash from $20K to $3.2K in November 2018.
This time around, it has taken about the same time for it to dump 77.3% from $69K to a new cycle low on Nov. 22 of $15,665.
Some analysts believe there is further to go as it took several months after the 2018 capitulation before any measurable upward momentum occurred. It was five weeks before the bottom was hit in 2018 after the capitulation began, and we’re only into the second week this time around.
$BTC Did you know that it took 5 weeks to finally hit the bottom once we started to capitulate in 2018?
Then it took 4 month of BORING PA before we saw the first God candle.
We barely started week 2 today.
This is a marathon, not a sprint. Get comfortable, it’ll be a while. pic.twitter.com/H9Yu8D2fUY
— Bleeding Crypto (@Bleeding_Crypto) November 21, 2022
Glassnode added that with spot prices around $16K, it is the first time since March 2020 that the whale cohort has been at an unrealized loss. It considers a whale as a wallet holding more than a thousand BTC.
Furthermore, last week saw the fourth largest spike in realized losses with a daily value of -$1.45 billion.
An uptick in spending coins by old hands is “often a signal of reduced conviction, fear, and capitulation amongst this more experienced cohort,” it observed.
Bitcoin Dumps to New 2022 Low
BTC prices have slumped to their lowest levels this year and in this market cycle. In early Asian trading on Nov. 22, Bitcoin hit a bottom of $15,665, according to CoinGecko. It lost 2.6% on the day and was trading at around $15,881 at the time of writing.
The asset has slumped 23% over the past fortnight as the wider crypto market slides deeper into crypto winter.
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