Certain on-chain metrics indicate that cryptocurrencies could be reaching the bottom of the bear market, according to analysis firm IntoTheBlock.
Lucas Outumuro, head of research at IntoTheBlock, points out in a new analysis that more than half of Bitcoin (BTC) holders are losing money on their positions, a level not seen since March 2020.
In the 2015 bear market, that number peaked at 62%, and in 2018 it hit 55%.
“Having majority holders in an asset that has appreciated 25,000% since inception could be a sign that the bearish momentum is getting too much. In 2015, it took six months for most cardholders to return to benefits, compared to three months in 2018.
Bear cycles appear to be getting shorter and shorter with a lower proportion of holders losing over time. This trend also favors the chances of a potential bottom approaching.”
Bitcoin is trading at $16,632 at the time of writing. The top-ranked crypto asset by market capitalization is down 1.92% over the past 24 hours.
Outumuro also notes that long-term investors have been buying BTC amid crypto market price woes. The amount of Bitcoin held by addresses that have held the king cryptocurrency for more than a year has increased by 2.7 million BTC so far this year.
explains the analyst,
“Long-term investor demand slowly builds a floor for Bitcoin in bear markets and they typically start selling to new investors soon after new all-time highs.”
Outumuro also highlights that more than $3 billion in Bitcoin and Ethereum (ETH) left centralized crypto exchanges this week. According to the on-chain analyst, digital assets leaving crypto exchanges potentially suggest hoarding or distrust of centralized platforms.
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