Glassnode has revealed that the severity of pullbacks in the Bitcoin market during bull cycles has weakened as the cryptocurrency market matures.
Decreased Volatility in a Bull Market
Historically, Bitcoin bull markets are marked by sharp price increases followed by significant selling pressure. However, data shows a clear trend of decreasing volatility in the current cycle. The most significant pullback in this bull market occurred on August 5, 2024, when Bitcoin's price fell 32%. However, Glassnode notes that most pullbacks in this cycle saw Bitcoin fall only 25% from local highs, and volatility for this cycle was among the lowest ever recorded.
Factors of Stability
This stability is attributed to a combination of factors, including the launch of spot Bitcoin exchange-traded funds (ETFs) that have generated significant demand and the growing interest of institutional investors.
Position of Short-Term Holders
Glassnode's analysis reveals that the majority of short-term Bitcoin holders are currently 'in loss status,' meaning the market price of their coins is below their purchase cost but they are not experiencing the extreme unrealized losses typically associated with market declines. This suggests that short-term holders remain resilient even during corrections, due to increased confidence driven by market developments such as institutional adoption and ETF launches.
The decreasing volatility and resilient position of short-term holders underscore the maturity of the Bitcoin market and its ability to adapt to changes.
