2022 Crypto Bear Market Is The Worst In History: Report

With inflation and tight liquidity putting extreme pressure on the overleveraged crypto ecosystem and Bitcoin (BTC) and Ethereum (ETH) both trading below their previous cycle all-time highs (ATH), a first in In history, markets plunged a “large proportion” in unrealized loss with all 2021-22 investors now underwater, according to a report.

A report compiled by blockchain analytics firm Glassnode indicates that as this financial pain sets in, large numbers of investors are liquidating their holdings, locking in record realized losses.

BTC drawdown at 73% below its Nov ATH

Bear market lows have historically been established with BTC drawdowns from 75% to 84% of the ATH and taking a duration of 260 days in 2019-20, to 410 days in 2015.

“With the current drawdown reaching 73.3% below the November 2021 ATH and taking a duration between 227 days and 435 days, this bear market is now firmly within historical norms and magnitude,” it reads. -he.

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Bear market lows have historically been established with BTC drawdowns from 75% to 84% of the ATH and taking a duration of 260 days in 2019-20, to 410 days in 2015.

BTC drops below half of its 200 DMA

Glassnode demonstrated how BTC moving below its 200-day moving average (DMA) corresponds to a bear market and more, when its prices are trading below its 200-week moving average.

In the current bear market, Bitcoin prices have fallen below half of its 200 DMA.

If 200 DMA is considered a long-term average, the Mayer multiple (MM) records price deviations above and below, to indicate overbought or oversold conditions respectively.

For the first time in history, the 2021-22 cycle recorded a lower MM value (0.487) than the low of the previous cycle (0.511). Only 84 of the 4160 trading days (2%) recorded a closing MM value below 0.5.

In the current bear market, Bitcoin prices have fallen below half of its 200 DMA.

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In the current bear market, Bitcoin prices have fallen below half of its 200 DMA.

BTC Fundamental Value Changes

On-chain analysis can help assess changes to fundamental BTC valuation patterns based on actual coin holdings and spending patterns.

Extreme capital outflows and realized losses can be assessed by changing the overall cost base per coin, via realized price.

“Times when spot prices trade below the realized price are rare, with the current market being only the third time in the last six years. The last two events were the March 2020 COVID crisis and the November 2018 capitulation event, both of which ended this bear market cycle,” says Glassnode.

Spot prices are currently trading at an 11.3% discount to the realized price, meaning the average market participant is now underwater on their position.

Extreme capital outflows and realized losses can be assessed by changing the overall cost base per coin, via realized price.

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Extreme capital outflows and realized losses can be assessed by changing the overall cost base per coin, via realized price.

The report further adds that 2022 has been a tough year for digital assets, with the bear market hitting both BTC and ETH.

Many on-chain and market performance metrics have reached historic and statistically significant lows.

“The various studies described above highlight the sheer scale of investor losses, the scale of capital destruction, and the observable capitulation events that have occurred over the past few months. Given the duration and size current bear market, 2022 can reasonably be considered the most significant bear market in the history of digital assets,” says Glassnode.

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