Bitcoin Hodler Supply hits ATH but quiet period ahead

The crypto and bitcoin markets are headed for a doldrums apart from on-chain activity. In its last weekly on-chain report for the year, analytics provider Glassnode reported that Bitcoin’s annualized realized volatility was the lowest since October 2020.

The metric corresponds to similarly low volatility levels at the bottom of the previous cycle in late 2018.

• Futures contract volumes have also fallen sharply to multi-year lows, it said, adding:

“This shows the massive impact of the liquidity squeeze, widespread deleveraging and disruption to many credit and trading desks in the space.”

• The FTX implosion has put out the fires in the futures markets and open interest (OI) has plummeted as a result. OI is a measure of the number of futures or options contracts held by traders and investors in active or open positions.
• Leverage ratios have also dropped, which is a good thing for crypto markets in general as most of the leveraged positions have been flushed out. What remains are hodlers and investors, not speculators and margin traders.
• Since the record realized gain at the peak of the 2021 bull market, there has been $213 billion in realized losses. This equates to 46.8% of bull gains, a very similar number to the 2018 bear market where 47.9% of realized losses were repaid.
• However, the supply of long-term holders has hit an all-time high of 13.9 million BTC.

“Despite these spectacularly large losses, the age of the coin supply and the propensity of those who remain to HODLing continues to rise.”

• Glassnode closed with what we already know: 2022 was a brutal year. It has pushed volatility and volume to multi-year lows as liquidity and speculation dried up, it added.
• “However, as coin volume increases, investors appear to be jumping in at every price decline,” it said.

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