5 Minutes
Glassnode: Bitcoin price shows echoes of early 2022
On‑chain analytics provider Glassnode says current Bitcoin price action mirrors the sideways market seen in early 2022. Its latest weekly report highlights several on‑chain metrics — including supply quantiles, Total Supply in Loss, and long‑term holder SOPR — that point to tightening profit margins and a larger share of BTC being held at a net unrealized loss.
Supply Quantiles Cost Basis Model explained
How the model maps investor profitability
Glassnode’s Supply Quantiles Cost Basis Model maps price levels to investor profitability across three quantiles: 0.75, 0.85 and 0.95. When BTC trades at the 0.75 quantile price, roughly 75% of circulating supply is in profit; the 0.85 and 0.95 quantiles mark 85% and 95% profitability thresholds. Falling below those bands signals that a meaningful portion of BTC holders have moved underwater.
Current quantile breaches and market balance
Since mid‑November, Bitcoin has slipped beneath all three quantile thresholds, according to Glassnode, putting more than 25% of supply at a loss. That dynamic creates a precarious market balance: on one side, recent buyers face capitulation risk; on the other, reduced seller activity could lead to exhaustion and the formation of a bottom. The firm points out that BTC crossed below the 0.75 quantile during the extended sideways phase of Q1 2022 — a comparison that matters for traders and long‑term investors alike.
Total Supply in Loss edges toward early‑2022 ranges
Why the 7.1 million BTC figure is significant
Another metric reinforcing the comparison is Bitcoin’s Total Supply in Loss, which measures how much circulating BTC is held at a net unrealized loss. The 7‑day moving average climbed to roughly 7.1 million BTC last week, the highest level since September 2023. Glassnode notes the current range of 5–7 million BTC in loss closely matches the bytes of supply seen during the early‑2022 sideways market.
Investor psychology and price sensitivity
High levels of supply in loss typically increase sensitivity to macroeconomic news and market shocks. With a sizeable cohort underwater, headline risk — interest rate moves, regulatory developments, or macro shocks — can trigger faster selling pressure. However, if sellers become exhausted, that same dynamic can produce a durable support base for a subsequent bull cycle.
Long‑term holder SOPR shows profits narrowing
What SOPR reveals about older coins
The Spent Output Profit Ratio (SOPR) for long‑term holders (LTHs) — defined by Glassnode as coins held for more than 155 days — has fallen sharply but remains above 1.0. A SOPR above 1 indicates LTHs are still selling at a net profit; the current value around 1.43 suggests profit margins have tightened considerably compared with earlier in the year.
Implications for market bottoms and capitulation
Lower LTH SOPR means older coins are changing hands with smaller gains, reducing the cushion long‑term investors have against price declines. That can extend periods of sideways price action as profit‑taking slows and buyers await clearer macro catalysts. Conversely, if SOPR drops below 1, it would signal LTHs are realizing losses — a classic capitulation signal that often precedes stronger recovery phases.
What traders and investors should watch
Key levels from Glassnode’s cost basis model and the Total Supply in Loss should remain front‑and‑center for crypto traders. Monitor the 0.75‑0.85‑0.95 quantiles, LTH SOPR trends, and macro headlines that could amplify volatility. Given the parallels to early 2022, expect periods of sideways consolidation punctuated by sensitivity to macro shocks until clearer on‑chain and price confirmations emerge.
Overall, Glassnode’s analysis provides a data‑driven lens on how current Bitcoin market structure compares with past sideways markets. For crypto investors, the takeaway is to balance awareness of increased supply in loss with the potential for seller exhaustion to establish support — a dynamic that has historically preceded major regime shifts in BTC price action.
Source: crypto
Comments
blockflux
Are we really repeating early 2022? 7.1M BTC in loss is scary, and 0.75 quantile breach... LTH SOPR 1.43 still >1 but margins tiny. If macro flips then capitulation? hmm
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