Bitcoin Market Structure Echoes 2022 Bear Start, Glassnode Warns
Overview
On-chain analytics firm Glassnode has highlighted a concerning similarity between the current Bitcoin market structure and that of the first quarter of 2022. This resemblance raises questions about the potential for market shifts and investor sentiment.
Current Market Dynamics
In its latest weekly report, Glassnode analyzed the current Bitcoin market structure, pointing out that it mirrors the conditions seen in Q1 2022. The firm referenced its Supply Quantiles Cost Basis Model, which categorizes price levels corresponding to varying degrees of investor profitability. The model outlines three key supply quantiles: 0.75, 0.85, and 0.95.
- If Bitcoin trades at the 0.75 level, 75% of the supply is in profit.
- The 0.85 and 0.95 levels correspond to 85% and 95% profitability, respectively.
Recent data indicates that Bitcoin has fallen below all three quantiles, suggesting that over 25% of the cryptocurrency’s supply is now at a loss. Glassnode noted that this situation creates a precarious balance between the risk of top-buyer capitulation and the possibility of seller exhaustion leading to a market bottom. This pattern is reminiscent of Bitcoin’s behavior during the sideways market in early 2022.
Another significant indicator is the Total Supply in Loss, which tracks the amount of Bitcoin held at a net unrealized loss. The 7-day moving average for this metric recently peaked at 7.1 million BTC, marking the highest level since September 2023, and resembling the early 2022 sideways market conditions.
Additionally, the Bitcoin long-term holder Spent Output Profit Ratio (SOPR) has also shown a decline, indicating that long-term holders are selling their coins at a profit, albeit with reduced profit margins. Currently, the SOPR stands at 1.43, suggesting that while long-term holders are still in profit, the margins have notably shrunk.
Impact on the crypto market
- The resemblance to early 2022 raises concerns about a potential bear market transition.
- A significant portion of Bitcoin supply is currently at a loss, indicating possible investor unease.
- The balance between buyer capitulation and seller exhaustion could influence future market movements.
- Long-term holder profit margins are decreasing, which may affect their selling behavior.
- Market participants are closely monitoring these indicators for signs of recovery or further decline.
Updated: 12/5/2025, 6:37:03 AM
