Glassnode’s latest weekly report highlights the similarities between current market conditions and the early stages of the 2022 bear market, also known as crypto winter.
The first indicator of stress is the elevated risk of capitulation from top buyers. Glassnode’s supply quantile cost basis, which tracks the supply cost basis held by top buyers, shows spot prices have fallen below the 0.75 quantile since mid-November, trading near $96,100. This puts over 25% of the BTC supply in limbo. A similar break below the 0.75 percentile marks the beginning of a bear market in 2022.
Meanwhile, the total supply loss from the 7-day simple moving average has now reached 7.1 million Bitcoins, which is the upper end of the 5 million to 7 million range in early 2022.
Despite these pressures, capital continues to flow into Bitcoin at nearly $8.69 billion per month based on net realized cap changes. However, that’s still well below the summer peak of $64.3 billion per month, according to Glassnode.
Off-chain trends point to further investor weakness. ETF demand continues to be weak, with IBIT recording outflows for a sixth consecutive week, its longest streak of negative numbers since its launch in January 2024. Redemption outflows over the past five weeks have totaled more than $2.7 billion.
Spot market activity is also deteriorating. Glassnode observed that cumulative volume delta (CVD) has rolled back and Binance CVD trend continues to be negative. Meanwhile, the Coinbase premium recently turned positive after a long period of losses and looks set to roll back again.
Derivatives data reinforced the decline in risk appetite. Open interest fell throughout November into December, indicating a reduced appetite for risk-taking, especially following the liquidation flash crash event on October 10th. Perpetual funding rates are mostly neutral and will turn negative in the short term, and funding premiums have cooled significantly, suggesting a more balanced and less speculative environment.
Glassnode also noted that traders were not prepared for a strong breakout ahead of next week’s Federal Open Market Committee (FOMC) meeting. The firm sees caution in the options market, which is to sell rather than chase upside. Earlier this week, put buying took over as Bitcoin approached $80,000. As prices subsequently stabilized, flows shifted toward call options activity as investor concerns subsided.