- Bitcoin accumulation has rallied since the collapse of FTX
- New BTC buyers have seen lower losses than an average existing BTC holder
As the general cryptocurrency market took a bite at recovery following the sudden collapse of FTX, Glassnode, in a new report, considered whether Bitcoin’s [BTC] continued sell-offs represented a continuation of the bearish trend. Was there a deeper psychological shift among BTC investors?
Read Bitcoin [BTC]’s Price Prediction 2022-2023
From distribution to accumulation
The on-chain analytics platform found that all cohorts of BTC investors have pivoted towards coin accumulation after the recent price decline.
Glassnode assessed BTC’s Accumulation Trend Score metrics and found that the recent surge in accumulation following the significant sell-offs could be linked to 2018.
This behavioral shift has also followed many major sell-off events, such as the March 2020 COVID crash, May 2022’s LUNA collapse, and June 2022, when the price first fell below $20,000.
An investor cohort that perfectly exemplifies the accumulation trend is holders of less than one BTC, known as shrimps. According to Glassnode, this category of investors has,
“…recorded two distinctive ATH waves of balance increase over the last 5 months. Shrimps have added +96.2k BTC to their holdings since the collapse of FTX and now hold over 1.21M BTC, equivalent to a non-trivial 6.3% of the circulating supply.”
The fate of new Bitcoin buyers
Glassnode went further to assess the state of new BTC investments following the FTX debacle. By observing the relationship between the cost basis of Short-Term Holders and the Spot Price, which was at $18,830k, Glassnode found that “the average recent buyer is underwater by -12%.”
While noting that new buyers had a superior entry point to the average holder, Glassnode found that sellers approached exhaustion in the current BTC market, and heavy distribution was met with an equal proportion of accumulation. This, according to Glassnode, drove the STH Cost Basis below the Realized Price, putting new buyers at an advantage.
History in the making
A look at BTC’s Adjusted MVRV Ratio revealed that the current BTC market was at its lowest “since the near pico-bottom set in Dec 2018 and Jan 2015.” Whenever this metric is less than one, it means that the active market is in an aggregate loss.
Glassnode found that this metric returned to a value of 0.63, “which is very significant since only 1.57% of trading days in bitcoin history have recorded a lower Adjusted MVRV value.”
An assessment of BTC’s aSOPR metric also revealed that “realized losses have also been historic in magnitude.” According to Glassnode,
“The recent market reaction to the FTX sell-off manifested as an aSOPR reading which broke below the low band for the first time since March 2020. The significance of this event is again only comparable with the COVID crash and the capitulation of the market in December 2018.”