Liquidity Shortage in Bitcoin Reminds Me of Pre-Bull 2020! Glassnode Report!

While economic data and FOMC minutes from the USA are awaited in the Bitcoin and cryptocurrency markets these days, an important report came from Glassnode.

Pointing out that both on-chain and off-chain volumes in the cryptocurrency market have reached historical low levels, Glassnode said that there is a serious liquidity shortage.

At this point, Glassnode analysts compared the liquidity shortage due to low volumes to the pre-2020 bull run and stated that “extreme apathy and boredom best describe the current sentiment in the market.”

“After seeing significant net capital inflows as 2023 began, Bitcoin and Ethereum have been seeing a return to neutral or negative inflows in the last few months.

In conclusion, it can be said that extreme apathy and boredom best describe the prevailing emotion.”

“Voltility Continues to Remain Low!”

Glassnode analysts stated that despite the sharp decline in August and the increase in volatility following Grayscale’s positive court decision against the SEC, the realized volatility remained quite low.

“While the market is still facing historically low volatility at this point, this is often a harbinger of increased volatility in the future.”

Glassnode also stated that while the bottom line for long-term investors in Bitcoin remains stable, short-term investors face significant unrealized losses.

“The supply held by Long-Term Investors reached a new ATH of 14.74 million BTC.

In contrast, the supply held by the Short-Term Investor group, which represents the more active part of the market, fell to the lowest supply level since 2011.

Additionally, while long-term investors remain resilient to the price, the majority of short-term investors are taking unrealized losses against BTC’s $26,000 price.”

Bitcoin is trading at $26,190 at the time of writing after the announced US inflation data.

*This is not investment advice.