Market decline

Three-quarters of BTC addresses are still profitable despite market decline: Glassnode

The price of Bitcoin (BTC) has fallen again recently, but new information from blockchain analytics firm Glassnode shows that up to 75% of Bitcoin addresses are in profit.

In its Week-On Chain report published On Monday, Glassnode analyzed the number of bitcoin wallets that are generating profits and found that around 70% to 75% of addresses were seeing an unrealized profit, well above the 45% to 50% of addresses during the 2018 bear market.

Commenting on the results, Glassnode analysts added that the current bear market is nowhere near as bad as previous ones:

“The current bear market is not as severe as the worst phases of all previous cycles, with only 25% to 30% of the market in unrealized loss. It remains to be seen whether additional pressure from the sell side will drive the market lower and thus drag more of the market into an unrealized loss like previous cycles. »

The report further revealed that long-term Bitcoin holders, those who have been holding for more than 155 days, were the least likely to be at a loss. More than 67.5% of long-term holders are making an unrealized profit, while short-term holders, those who have been holding for less than 155 days, saw only 7.88% making gains.

Currently, the price of Bitcoin is below $40,000 and has fallen almost $39,000 in the last 24 hours, which has put the asset back into bear market territory. The direction Bitcoin will head has been speculated down to $30,000, while other data shows traders trying to push the price to $50,000.

The report also detailed that 58% of the volume on the Bitcoin network is in what it calls “profit dominance,” a metric that hasn’t been seen heavily since December 2021.

Glassnode added that bear markets typically experience long stretches of trading volume that generate losses, and this reversal in earnings dominance could be a sign that sentiment is changing, with Bitcoin demand potentially buying the sell side.

However, writes Glassnode, “given that prices continue to struggle, this suggests that demand remains somewhat lackluster and investors are taking profits in whatever market strength can be found.”

Analysts added that the market has seen daily realized profits of around 13,300 BTC since mid-February, while daily realized losses have fallen from around 20,000 BTC in January to around 8,300 BTC last week.

Related: Bitcoin Price Drop to $39.2K Puts BTC in “Bear Market” Territory

While a large share of addresses and transactions are generating profits, the number of overall users on the Bitcoin network and therefore the number of transactions continues to “languish”, according to analysts.

Transactions on the network stand at around 225,000 daily transactions, a number similar to the bear market from 2018 to 2019. Transactions spiked from mid-2021, but analysts noted that “this is nowhere near the hype cycle observed during bull markets”.