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Breaking News: Tether Resolves Celsius Lawsuit With Major $300 Million Settlement Deal
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Breaking News: Tether Resolves Celsius Lawsuit With Major $300 Million Settlement Deal

Bitcoin Crash Unlike LUNA & FTX Collapses, Says Glassnode: Here’s Why

Keshav Verma
Keshav Verma
1 hour ago
2 mins read
Bitcoin

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On-chain analytics firm Glassnode has explained how the latest Bitcoin selloff is different from the LUNA and FTX crashes of 2022.

Bitcoin Supply In Profit Trend Is Structurally Different For The Latest Crash

In a new post on X, Glassnode has discussed how the recent bearish action in BTC compares against some of the past crashes. The analytics firm has used the Percent Supply in Profit to make the comparison. This on-chain indicator measures, as its name suggests, the percentage of the total Bitcoin circulating supply that’s sitting on some net unrealized gain right now.

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The metric works by going through the transaction history of each token in circulation to see what price it was last transferred or sold at. If this previous transaction price was less than the latest spot price for any token, then it may be considered to be currently sitting on some profit.

The Percent Supply in Profit adds up all coins of this type and determines what percentage of the supply they make up. Another indicator called the Percent Supply in Loss tracks the tokens of the opposite type. If one of these indicators is known, the other can simply be calculated by subtracting it from 100, since the total BTC supply must add up to 100%.

Now, here is the chart shared by Glassnode that shows the trend in the Bitcoin Percent Supply in Profit over the last few years:

Bitcoin Percent Supply in Profit
The value of the metric appears to have plummeted in recent days | Source: Glassnode on X

As is visible in the above graph, the Bitcoin Percent Supply in Profit hit the 100% mark earlier in the month when the cryptocurrency’s price set its new all-time high (ATH). When the sharp selloff at the end of last week started, the indicator’s value was still well over the 90% mark, meaning the vast majority of investors were in the green. As such, the crash was more profit-driven, with losses mostly coming from the top buyers.

During some of the big crashes of the 2022 bear market, however, the market conditions were quite different. In the LUNA and FTX collapses, the Percent Supply in Profit sat under 65%.

In the chart, Glassnode has also highlighted the data of another metric: the Net Realized Profit/Loss, measuring whether profit-taking or loss-taking is dominant on the BTC network. From this indicator, it’s apparent that the aforementioned crashes saw deep negative values, implying a broad capitulation event took place.

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The 3AC collapse occurred alongside a higher Percent Supply in Profit, but it also witnessed a notable spike in loss-taking. Based on this, Glassnode concludes that the latest Bitcoin crash was “a structurally different, leverage-driven event.”

BTC Price

At the time of writing, Bitcoin is trading around $110,400, down more than 11% over the last week.

Bitcoin Price Chart
The trend in the price of the coin over the last five days | Source: BTCUSDT on TradingView
Featured image from Dall-E, Glassnode.com, chart from TradingView.com
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Keshav Verma
Keshav Verma

Keshav Verma

Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.

Read more

Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.

In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.

Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.

Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..

Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.

Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.

As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.

Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.

Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.

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Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality
Created by industry experts and meticulously reviewed
The highest standards in reporting and publishing
How Our News is Made

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