In its weekly on-chain analysis report on Oct. 10, Glassnode stated that Bitcoin has “remained remarkably stable” in recent weeks when compared to traditional asset markets such as forex, volatile equity, and credit.
Against a backdrop of central bank rate hikes, rampaging inflation, and a strong US dollar, Bitcoin has been uncharacteristically low in volatility, it added.
The report compared the current market conditions to previous bear market lows to conclude that “on-chain metrics, market structure, and investor behavior patterns are dotting of the i’s, and crossing the t’s for a textbook bear market floor.”
Bear market bottoms are usually times of slow and steady accumulation by institutions, experienced investors, and whales.
The report compared two charts, one in the bear market between September 2018 and April 2019 and the current one that started in April 2022. They were uncannily similar, each with a capitulation event and bear market rallies.
It also reported an uptick in Bitcoin whale withdrawals from exchanges which is also an accumulation signal as the asset is being stored rather than primed to sell. The net whale outflow from exchanges hit 15.7K BTC, the largest since June 2022. It defines a whale as an entity holding more than a thousand coins.
Glassnode also used a metric called an Accumulation Trend Score to determine aggregated balance change intensity of active investors over the past 30 days. The metric “indicates significant accumulation by large entities has taken place,” it said before adding the current state suggests an equilibrium or neutral market structure, which remains similar to early 2019.
Furthermore, Bitcoin is still trading below key long-term price model indicators, including the 200-week moving average at $23,561 and the realized price at $21,204, according to WooCharts.
In the short term, Bitcoin prices have retreated a further 2.2% on the day, falling to $19,000 at the time of writing, according to CoinGecko.
The asset has repeatedly failed to break resistance just below the $20,500 level and is heading back toward support which remains strong at $18,500. A breakdown of this could see BTC tumble to new lows for this bear market, but at the moment, markets remain rangebound as the consolidation and slow accumulation continue.