Cryptocurrency Market Exhaustion: Glassnode Analysts Weigh In

Volatility, liquidity, and trading volumes within the Bitcoin network have all hit record lows. This could potentially signal a state of extreme stagnation and uncertainty in the crypto market, as pointed out by Glassnode analysts. Earlier this year, both Bitcoin (BTC) and Ethereum (ETH) experienced significant capital inflows. However, in recent months, analysts have observed a return to a neutral or even an outflow state, indicating a degree of stagnation and uncertainty prevailing in the market.

The daily transaction volume on the Bitcoin network is currently hovering around cyclical lows, standing at approximately $2.44 billion per day, reminiscent of levels seen in October 2020. Interestingly, long-term holders seem unfazed by the lack of on-chain and off-chain liquidity and are not rushing to dispose of their assets. Glassnode added, "Realized profits and losses are also at a level equivalent to the 2020 market."

The yield for long-term Bitcoin holders is gradually increasing, although it remains historically low. However, the majority of short-term holders find themselves stuck in unrealized losses, with only 16.3% of their positions still profitable. As of the time of writing, BTC is trading below $26,000, putting most short-term holders in a precarious position.

The supply of stablecoins has been steadily decreasing since April 2022. Investor concerns stemming from the UST crash have prompted stablecoin holders to offload their assets. As a result, the overall supply of stablecoins has decreased by 26%, dropping from $163 billion to $120 billion since April of last year.

However, this trend varies depending on each specific stablecoin. For instance, since November 2022, the supply of USDT has increased by $13.3 billion, while the supply of USDC has decreased by $16.7 billion. Binance's stablecoin, BUSD, has witnessed an 89% decrease.