Bitcoin Pain Still Far From Bear Market Levels, Says Glassnode Researcher

Glassnode’s senior researcher has revealed how Unrealized Loss on the Bitcoin network is still smaller than even mild bear markets in the past.

Bitcoin Relative Unrealized Loss Hit Just 1.3% Recently

In a new post on X, senior researcher at on-chain analytics firm Glassnode, CryptoVizArt, has talked about how Bitcoin currently compares to past bearish periods in terms of Relative Unrealized Loss.

The Unrealized Loss is an indicator that measures, as its name suggests, the total amount of loss (in USD) that BTC investors as a whole are carrying in their wallets.

This metric works by going through the transaction history of each coin on the blockchain to find what price it was last moved at. If this previous transaction price was more than the current spot price for any token, then that particular token could be assumed to be sitting on some net unrealized loss right now.

The exact amount of loss that the coin carries is naturally equal to the difference between the two prices. The Unrealized Loss sums up this value for all loss tokens on the blockchain.

In the context of the current discussion, a modified form of the indicator is of interest, called the Relative Unrealized Loss. This metric calculates the holder loss as a percentage of BTC’s market cap.

The advantage of the Relative Unrealized Loss over the usual metric is that it makes a comparison across two different BTC cycles more reliable. Bitcoin has seen significant growth in stored capital with each cycle, so the absolute amount of loss held by investors in bear markets also rises with each cycle. By accounting for the market cap, the indicator normalizes the Unrealized Loss across cycles.

Now, here is the chart shared by CryptoVizArt that shows the trend in the Bitcoin Relative Unrealized Loss over the last few years:

As displayed in the above graph, the Bitcoin Relative Unrealized Loss has remained at low levels during the past few months, indicating that loss among holders has stayed low in comparison to the market cap.

Even during the cryptocurrency’s latest drop, the indicator only reached a value of 1.3%, corresponding to investor loss being just 1.3% of the market cap. “In mild bear markets, this typically exceeds 5%, and in severe ones, it exceeds 50%,” explained the Glassnode researcher. “The market pain is still far from what defines a true bear phase.”

It now remains to be seen how Bitcoin will develop in the coming days, and whether the Relative Unrealized Loss will cross one of the bear market thresholds.

BTC Price

Bitcoin fell below $107,000 during its recent decline, but the coin has since seen a small rebound back to $109,500.