Analysts have said that the “historic” bear market that Bitcoin ($BTC) and other cryptocurrencies are going through has caused the largest outflow of capital in the digital asset industry.
Analysts at the on-chain analytics company; Glassnode, say that the current bear market for cryptocurrencies may be the worst ever. This is because Bitcoin’s price fell below the 200-day simple moving average after the market capitalization of the whole industry fell below $1 trillion.
The indicator is “often employed” to identify whether BTC is in a bull or bear market. Prices that remain above the cryptocurrency’s 200-day moving average indicate a bull market, while prices that fall below that moving average indicate a bear market. The Mayer Multiple (MM) by Glassnode, which analyzes the price of BTC from a historical perspective, also uses the indicator.
In addition, Glassnode mentioned the 30-Day Position Change of the Realized Capitalization metric, which “allows us to view the relative monthly capital inflow/outflow into the BTC asset on a statistical basis” and “is a variation of market capitalization which values each UTXO (unspent transaction output) based on the price at which it was last moved.”
According to this metric, “Bitcoin is currently witnessing the greatest capital outflow event in history, hitting -2.73 SD (standard deviation) from the mean.”
In a video that was released earlier this month, analysts at Glassnode examined the current bear market and highlighted that historically, BTC’s price fell by more than 80% during bear markets before reaching a bottom. The cryptocurrency’s decline from its all-time high of $69,000 would be almost 80% at around $13,800.
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