On-Chain Analysis of Glassnode

On-Chain Analysis of Glassnode

By bit.team

The analytical company Glassnode notes that, despite the recent downturn, Bitcoin remains fairly stable compared to stock markets. According to Coinmarketrate.com Bitcoin is moving sideways, and is in the range of $38 – 40k.

The price movement of the BTC. Source: Coinmarketrate.com

The price movement of the BTC. Source: Coinmarketrate.com

The NASDAQ got off to its worst start since its inception, falling 20%. To find a catastrophe of the same scale, you need to go back to 1973. Over the past week, almost $3 trillion has flowed from the global stock market. This is equivalent to four Bitcoin networks.

GN notes, however, that “correlations between Bitcoin and stock markets remain close to historical highs.”  Bitcoin continues to suffer from the fact that it is still perceived as a risky asset.

However, those who understand Bitcoin, such as Michael Saylor, argue that it is actually the best asset to reduce risk.

In short, in this issue, GN reports that the share of BTC purchased at a discount to the current price is about 70% (that is, 30% are in the red). According to Glassnode, not low enough to lower the market:

“The previous bottoms of BTC/USD in 2019 and 2020 were set when we were between 45% and 57% of BTC held at a loss.”

GN believes that a return to the “pain threshold” of 60% can become a reliable bottom from which a bull market can begin:

“BTC/USD should fall to $33,600 for another 1.9 million BTC to be in the red (10% BTC)”.

In other words, this means that the majority of BTC buyers over the past 16 months have been in the red. Then we can see the purge to move forward better.

Another very interesting piece of information provided by GlassNode is that the pivot point for short-term holders is at $46,910.

In particular, BTC purchased less than 150 days ago currently show unrealized losses of 18% (on average). For GN, if this indicator deteriorates further, we will approach the levels characteristic of the most severe recessions in the past.

In general, long-term holders (BTC > 150 days) bought their BTC at an average price of $13,010. This indicator is decreasing every year, which suggests that some of the buyers of 2021 are capitulating.


Now let’s look at the main purpose of Bitcoin: protection against hyperinflation. In 51 countries of the world, inflation exceeds 10%…

First of all, the relationship between Bitcoin and inflation is not mathematical. It is not enough to own BTC to be automatically protected from inflation.

Bitcoin protects against inflation if and only if the BTC/USD rate rises by the same amount as inflation increases. If inflation is 10%, the BTC/USD rate should rise by at least 10%. That’s the point.

And in order for the BTC/USD rate to rise, more money must flow into Bitcoin than out of it.

A 10% increase in the BTC/USD exchange rate requires a 10% increase in the amount of fiat currency invested in BTC.

In other words, Bitcoin protects against inflation if and only if the growth rate of the amount of money in BTC is at least equal to the rate of inflation.

Fortunately, there are still tens if not hundreds of billions that should come to Bitcoin over the next few years. Recall that Bitcoin is worth only $740 billion, compared to gold – $11.8 trillion.

Since BTC is a more scarce and liquid instrument than gold, it is only a matter of time before it absorbs it. And that’s when one Bitcoin will cost $660,000.

We can reach an even higher figure if the $15 trillion that has recently flowed out of the global stock markets also ends up in Vitcoin. Then one BTC will cost more than $ 1.5 million.

Global market capitalization (104,000 billion)

Global market capitalization (104,000 billion)

On the other hand, since the last ATH, $8 trillion has left the global debt market. And we probably haven’t seen anything yet, because the Fed has just started raising rates.

The scent of crisis is in the air. Keep in mind that S&P and NASDAQ showed the worst monthly results since the 2008 subprime crisis (-8.8% and -13.3%, respectively, in April). In one month, almost 2.7 trillion dollars flowed from the US stock market.

The Norwegian National Welfare Fund, whose value is equivalent to $ 1.2 trillion, considers it possible that the value of its fund may fall by 40%. “We are facing probably the biggest changes in the last 30 years,” its director, Nicolai Tangen, said at a parliamentary hearing.

Tangen said that the Norwegian fund, which invests all its assets in foreign stocks, debt obligations, real estate and renewable energy projects, has “nowhere to hide.”

But yes, in Bitcoin… In fact, the Wall Street Journal suggests that it is:

“Inflation and rising interest rates have undermined the profitability of stocks and debt, making cryptocurrencies more attractive.”

The giant Fidelity fund (4.2 trillion) has realized this, and now offers its clients to deposit up to 20% of Bitcoin into a savings plan. Even Goldman Sachs has just started issuing loans secured by PTC.

In conclusion, we note that some believe that the Fed’s rate hike is bad news for Bitcoin.


Bubbles in the stock, bond and real estate markets are about to burst, and money flows will soon seek refuge in Bitcoin.