Glassnode reports that many on-chain and market performance metrics have reached historically and statistically significant lows.
Regarding the current Bitcoin bear market conditions, the report states that the price of Bitcoin has fallen to 73.3% of its all-time high, which is in line with the upper limit of previous bear market lows. The duration from top to bottom ranges from 227 days to 435 days, depending on where the bear market begins. The deviation below the 200-day moving average is huge, with only 2% of the sessions doing worse than they are now. On a statistical basis, the market has achieved its largest monthly drop in history. This is supported by selling behavior that locks in absurd relative losses so large that only 3.5% of historical trading days have seen larger capital outflows.
The ratio between losses and profits transferred has reached an all-time high, synonymous with beleaguered investors. As for the current state of the ethereum market, the report noted that ethereum’s retracement from its all-time high peak was -79.5%, placing the sell-off within the upper bound of previous bear market bottoms.
Bitcoin’s dominance controls the direction of capital flows, which historically bodes well for Ethereum’s continued underperformance over the next few months. The value of ether captured per byte indicates that capital efficiency is deteriorating, and there is a possibility of a further 50% drop. An earlier recovery would indicate an improvement in the value capture mechanism of the Ethereum network.
Over the past 6 months, there have been two of the largest statistical capital destruction events in Ethereum history, with a combined $27.6 billion in realized market capitalization experiencing net outflows. The MVRV of both ETH and ETH 2.0 has shrunk significantly, indicating that the average holder of ETH is holding large unrealized losses.
Ethereum trading profitability continues to hover at levels last seen in January 2019, with investors realizing an average loss of -16% per trade.
Given the broad duration and scale of the current bear market, it is reasonable to consider 2022 to be the most disruptive bear market in the history of digital assets, the report concluded.