Glassnode released its latest weekly report, indicating that while Bitcoin plummeted to $93,000 last week, it has not strayed too far from the starting point of this cycle. The market remains primarily characterized by fluctuations and sideways consolidation; however, altcoins have suffered significantly, with a market capitalization decline of $234 billion over the past two weeks, marking one of the largest downturns in altcoin history.
(Background: Powell’s decision not to lower interest rates did not trigger the altcoin crash, analysts suggest this is a bottom signal for the market.)
(Additional context: Bloomberg analysts predict the approval probabilities of four major altcoin ETFs (SOL, XRP, DOGE, LTC), with the ADA spot ETF also joining the fray.)
In its report published on the 11th, Glassnode noted that Bitcoin investors experienced drastic volatility last week, dropping as low as $93,000. During this intense fluctuation, Bitcoin investors realized losses totaling $520 million, one of the largest losses in this bull market cycle, surpassed only by the loss on August 5, 2023.
This extreme price volatility was primarily driven by Trump’s threats to impose tariffs on Canada, Mexico, and China, creating a climate of uncertainty in the overall macroeconomic environment, leaving investors to wait and observe. Additionally, the continued strength of the dollar has also placed some pressure on market liquidity.
However, Glassnode pointed out that despite the significant fluctuations in Bitcoin in recent weeks, it has not deviated far from the starting point of this cycle. The market continues to exhibit volatility and sideways consolidation, largely due to a significant increase in liquidity entering the cryptocurrency market and the countering effect of large-scale capital flows against price inertia. Furthermore, a new group of more steadfast holders has emerged, promoting a relative stability in Bitcoin’s price, even amid ongoing macroeconomic turbulence.
Historic Decline of Altcoins
In contrast, the altcoin market has faced severe turmoil. Glassnode reported that over the past two weeks, the altcoin market capitalization declined by $234 billion, with a few days witnessing even greater absolute declines. It is reasonable to consider this a bear market event within the altcoin sector, marking one of the largest declines in altcoin history.
Regarding the significant selling pressure in the altcoin space, Glassnode believes that many assets struggle to achieve widespread adoption or establish a solid market positioning, making the market environment more challenging and leading to a massive collapse in altcoin prices. In recent weeks, all categories of altcoins have underperformed compared to Bitcoin.
Glassnode discovered that the vast majority of altcoins experienced a similar comprehensive sell-off, with little distinction between different categories of altcoins. In simple terms, the altcoin market has declined almost synchronously, with only a few exceptions managing to escape the downturn.
Glassnode’s analysis indicates that overall, the altcoin market is in a bear market, while Bitcoin remains in good condition, showing no signs of similar weakness. This highlights an expanding divergence between Bitcoin and the broader digital asset market.
Currently, key support levels for Bitcoin have been identified: the MVRV Z-Score (an indicator of whether the market is overvalued or undervalued) average at $96,300 and the cost basis of short-term holders at $92,200. In contrast, the outlook for the altcoin market appears more uncertain, with optimistic sentiment gradually dissipating as market capitalization continues to decline.
