According to Glassnode analysts, recent Bitcoin market activity reflects some resilience despite periods of price volatility. The declines during this bull cycle are relatively shallow and continue to follow patterns observed in previous market uptrends, they added.
Wednesday’s Glassnode Onchain newsletter points out that while there has been a recent downturn, the overall structure of the Bitcoin market is consistent with a historical bull market, reflecting both the resilience of demand and the limited size of the recent correction.
“The bull market’s decline, while relatively shallow, is consistent with the upward trend of historical bull markets, highlighting both the similarity and relative resilience of the current cycle,” a Glassnode report on Wednesday said.
At the end of September, Bitcoin was in a downward trend, falling from around $66,000 to a low of $60,000 on October 3. After this decline, the price stabilized to trade within a narrow range between approximately $62,000 and $63,000.
Demand underpins market resilience
Glassnode’s latest report highlights that while Bitcoin has experienced a correction, it is mild compared to previous cycles.
“The maximum drawdown is somewhat shallower than typically seen in previous bull markets,” the analysts wrote, suggesting demand-side dynamics are playing a role in mitigating deeper declines.
The two key metrics that Glassnode highlights are actual market averages and active investor prices, both of which help estimate the average cost basis of Bitcoin investors during the current market cycle. The actual market average reflects the average price at which Bitcoin has been earned across all market participants over time. Active investor pricing, on the other hand, focuses on the average cost basis of investors who have been actively trading, especially in recent months. Since the beginning of the year, spot prices have generally remained above two levels, with brief exceptions. According to the report, this means that a strong support base exists, helping to stabilize the market while prices are falling.
“Recent market movements show investor action remains robust and significant demand is mitigating the impact of the correction,” the analysts added.
Focus on short-term Bitcoin holders
According to today’s report, one group to watch is Bitcoin short-term holders, defined as investors who have purchased Bitcoin within the past one to three months. Glassnode says Bitcoin’s recent price has regained significant cost basis for the group.
“This is an encouraging sign of strength,” analysts said. However, if the market fails to sustain above this level, recent buyers will face increasing pressure, especially given the difficult circumstances of the past few months, the report added. In such a scenario, short-term holders would be forced to sell, potentially leading to further volatility.
Analysts highlight short-term holding indicators, noting that new investors’ market-to-realized value (MVRV) ratios are higher than the lows observed during the yen-carry trade clearing in early August.
“We can also observe improved profitability for new investors, with the MVRV ratio rebounding from its lows and recovering its 90-day moving average during the yen carry trade clearing period in early August, which is another positive sign,” he added.
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Short Holder Market Value to Realized Value (MVRV) indicator. Image: Glassnode.
CryptoQuant notes price levels that are important for short-term Bitcoin holders.
Adding another layer of analysis, CryptoQuant emphasized the importance of monitoring the average cost basis of short-term holders. According to X’s recent CryptoQuant post, the average cost basis for short-term holders is currently near a critical support level.
“We can roughly say that a close above $64,500 will give strength to the bullish trend. However, on the contrary, losing $61,600, which is the average cost of short-term holders, i.e. 1 to 3 month holders, will cause Bitcoin investors to lose patience. It will be tested seriously,” the CryptoQuant post added.
According to The Block’s Bitcoin price page, the price of Bitcoin has fallen about 1% over the past 24 hours and is sitting at around $61,705 at 12:37 PM ET. The global cryptocurrency market cap is $2.27 trillion, down 1.5% in the last 24 hours.
According to CoinGecko data, the total cryptocurrency trading volume last day was $82.7 billion, with Bitcoin dominance at 54.2% and Ethereum dominance at 12.9%.
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