Glassnode

The Week On-chain 43, 2023 - A Breath of Fresh Air: Bitcoin Breaks to $35K Bitcoin prices have broken to new yearly highs, trading above the mid-cycle price level of $30k, and reaching $35k. The market found sufficient strength to break above several important psychological pricing levels, making the weeks that follow important to keep an eye on. Executive Summary - Bitcoin bulls have managed to push BTC prices back to $35k, breaking several key technical and on-chain pricing levels which were co-located around $28k, a noteworthy sign of strength. - Derivatives markets contributed to the move with a pair of short-squeezes, closing out of 60k BTC worth of futures positions, and a $4.3B surge in options call open interest. - Long-term investors are unphased by this weeks price action, with Long-Term Holder supply reaching new ATHs, and revived supply volumes remaining insignificant. Read our full analysis in The Week On-chain Newsletter, or watch our latest video report.

In this week's Glassnode Clips, we focus on The Realized Cap HODL Waves: - The Realized Cap HODL Waves assesses the distribution of wealth across age cohorts, offering a clearer perspective on Bitcoin's investor sentiment. - During bull markets, the landscape is dominated by new speculative investors, whereas bear phases see committed long-term HODLers accumulating, highlighting the shifting dynamics of wealth through market cycles. - This tool provides a vivid display of real-time capital rotations in the market, emphasizing moments when older Bitcoin coins are spent and aiding in a detailed market analysis. Discover more in the latest Glassnode Clips below 👇 https://www.youtube.com/watch?v=ZHDk9hr7sBg

Capital rotation within digital assets markets occurs both between assets, as well as internally as coins change hands at different acquisition prices. In this edition, we develop two indicators based off the Realized Cap and NUPL to track this rotation of capital between investors. Executive Summary Capital rotation in digital asset markets occurs both between assets (as covered last week), but also internally as coins change hands and trade between investors. We develop a tool utilizing the Realized Cap HODL waves to track the rotation of capital from longer-term investors to speculators (and back again). We couple this with a second indicator designed from NUPL variants, with both indicators helping to map out where the market is relative to past distribution cycles.

Capital rotation within digital assets markets occurs both between assets, as well as internally as coins change hands at different acquisition prices. In this edition, we develop two indicators based off the Realized Cap and NUPL to track this rotation of capital between investors. Discover more in the latest Week On-Chain👇 https://glassno.de/3QjOIH9

🔍 Finance Bridge by Glassnode is our go-to resource for traditional finance entities looking to integrate on-chain insights into their trading and investments. In the October edition, we delve into Bitcoin's resilience amidst panic selling and the hints of new capital inflow. We also explore how global economic challenges influence Bitcoin's liquidity and the unique options market dynamics. Plus, learn how to use the MVRV Ratio to inform your trading and investment strategies. Discover all these insights here: https://insights.glassnode.com/finance-bridge-edition-5/

In this week's Glassnode Clips, we focus on Percent Short-Term Holders in Profit: - Short-term holders have recently been the focus, and it's evident they take profits during market peaks and incur losses during dips, as highlighted by a blue oscillator representation. - Short-term holders are significantly sensitive to their cost-basis; thus, they tend to sell when in profit, but when facing potential losses, they can quickly succumb to panic, leading to asset transfers. - Interestingly, while short-term holders predominantly impact immediate price actions, long-term holders are more active, especially during the pronounced cycle peaks and troughs. Discover more in the latest Glassnode Clips below 👇 https://www.youtube.com/watch?v=2AfzrLRRgVY

In this week's Glassnode Clips, we focus on Transaction Counts and Block Capacity: - SegWit utilizes a dual structure that separates transaction data from witness data, allowing inscriptions to be placed in the signature side and benefiting from data discounting. - In previous bull markets, the transaction count peaked at 400,000 daily, but with modern optimizations, we're seeing numbers rise to 550,000 due to efficient packing of inscriptions. - The average block now contains between 2.8k - 3.5k transactions, with daily spikes occasionally reaching over 4k per block. Discover more in the latest Glassnode Clips below 👇 https://www.youtube.com/watch?v=Qz0T9Ln-eYQ

Liquid staking transforms the supply dynamics of Ethereum and creates a shift in the demand for Ethereum's native token. We discuss how stETH has become particularly attractive on lending platforms, whilst stETH liquidity on decentralized exchanges diminishes. Discover more in the latest Week On-Chain below 👇 https://t.co/7c3HKsC0LZ

New Chart of the Week is up! We're exploring the on-chain cost basis and MVRV metrics, spotlighting short-term holders. With Bitcoin's price testing its local range, why are these some of the key on-chain indicators to watch? Watch the video below for insights that can help you with your trading and investment decisions: https://youtu.be/GgDLdZPAX8I

In this week's Glassnode Clips, we focus on the upcoming Bitcoin Halving: - We delve into the implications of the halving, exploring how the reduction in rewards will necessitate a significant increase in Bitcoin’s price to prevent operational losses for miners, potentially leading to the exit of those who can't maintain efficiency in this new landscape. - Our models reveal a strong correlation between mining difficulty and market cap with a discernible stress point evident 24,000 USD. - In a post-halving scenario, the focus intensifies on the survival and efficiency of miners, with indicators suggesting a requisite Bitcoin value above 30,000 USD to alleviate stress, thus offering a glimpse into market resilience and health under varying conditions. Discover more in the latest Glassnode Clips below  👇 https://www.youtube.com/watch?v=G0lf7q9OmOc

Inscriptions have been a significant buyer of Bitcoin blockspace since their introduction in Feb 2023. In this edition, we explore whether inscriptions are displacing monetary transfers, and how the increase in fees has impacted miner profitability. Executive Summary Inscriptions act as a form of buyer of last resort for cheap blockspace, and appear to be sensitive to the absolute fee paid. Inscriptions are best thought of as a sort of 'packing filler' which is stuffed into any remaining space once the higher value monetary transfers are packed into blocks. Analysis of fees and volume need to consider that there can be a higher perception of 'value' assigned to the inscriptions beyond the BTC volume being transferred and held. Despite a meaningful uptick in fee revenue for miners, the halving event is likely to put many of them into extreme income stress unless BTC prices increase meaningfully.

In this week's Glassnode Clips, we focus on RHODL Ratio: - High RHODL values indicate that a significant proportion of the Bitcoin supply is being held in coins that have recently moved, illustrating a tendency towards short-term holding, whereas low values are indicative of predominant long-term holding. - The RHODL Ratio is currently near its two-year median, which has traditionally been crucial in indicating market transitions; the lack of a clear break in either direction is emphasizing the current state of high market indecision. - The RHODL Ratio has consistently served as a reliable indicator in identifying key market trends and shifts, positioning it as an essential tool for comprehensive market analysis. Discover more in the latest Glassnode Clips below 👇 https://www.youtube.com/watch?v=LUt0XkuHyGs

In this week's Glassnode Clips, we focus on Stablecoin Dominance: - Tether (USDT) is regaining its market dominance, closely approaching its previous peak levels. This resurgence indicates its escalating importance, especially in markets outside the United States. - A noteworthy increase in USD Coin's (USDC) outflows has been observed in 2023, a trend likely driven by U.S. capital migrating toward markets offering higher interest rates. - Pertinent to the overall stablecoin environment, a net outflow is evident across the board, suggesting a prevailing trend of stablecoin redemptions in the market. Discover more in the latest Glassnode Clips below 👇 https://www.youtube.com/watch?v=LbjMKR7rzf0

With almost all Short-Term Holders now underwater on their position, sentiment has shifted towards the negative. In this report, we explore several measures to track investor sentiment. We develop indicators which assess divergences between the market and observed investor behavior. Executive Summary We review the market position relative to two on-chain pricing models, both of which are intersected during past cycle lows, and in the March 2020 sell-off. Patterns of accumulation and distribution tend to align with local highs and lows, and we demonstrate how this plays out in on-chain data. A super-majority of Short-Term Holders are now underwater on their position, with a new indicator suggesting negative sentiment dominates this cohort at present. Read more in The Week On-chain Newsletter.

📢 Fresh from Glassnode: This week's Chart of the Week looks for insights in the the Short-Term Holder Supply in Profit metric. Get a grip on the sentiment of recent market entrants and understand the potential market shifts. How can you hedge yourself against potential losses? Equip yourself with knowledge that will help you navigate the Bitcoin market in the days and weeks to come. https://www.youtube.com/watch?v=OZ8CszH7gtA

🔍 Finance Bridge by Glassnode is our go-to resource for traditional finance entities looking to integrate on-chain insights into their trading and investments. In the September edition, we delve into Bitcoin's momentum shifts as seen through on-chain profitability metrics, explore how macroeconomic dynamics impact the crypto markets, and explain how to use the Realized Cap to inform you trading and investment strategies. Discover all these insights here: https://insights.glassnode.com/finance-bridge-edition-4/