Glassnode reports: Bitcoin bottoming process \'still in progress but not yet complete\'

Glassnode reports: Bitcoin\'s bottoming process is \"in progress, but not yet completed\"

The latest data released by on-chain analysis company Glassnode shows that Bitcoin\'s price trend is still undervalued, and the bottom formation process is still in progress. A report released this week noted that Bitcoin has fallen below the average cost base of key investor groups for the fifth consecutive month, a historically important signal that the market has not yet fully bottomed out.

Glassnode data highlights long-term bearish signals

Based on Glassnode\'s weekly analysis, the current market cycle shows that Bitcoin is trading at a price lower than the realized prices of several important groups, including short-term and long-term holders. This continued undervaluation suggests that selling pressure remains high and that a clear market bottom has not yet been formed. The company specifically pointed out that the scale of surrenders by long-term holders has reached an all-time high of approximately $280 million per day. A sell-off of this magnitude by these usually determined investors is a key indicator of market stress and is often associated with later stages of the bear market, but Glassnode warns that the process is not yet complete.

ETF Fund Outflows and Derivatives Market Trends

Compounding bearish sentiment is continued net outflows from spot bitcoin exchange-traded funds (ETFs). This trend reflects weakening institutional interest and the caution of traditional financial participants when entering the crypto space. At the same time, the derivatives market presents a complex situation. Although investors in the futures market still maintain net long positions, indicating some confidence in a potential recovery, the options market has priced the possibility of further declines. The divergence suggests that while some traders are betting on a rebound, the broader market is hedging against further declines.

What this means for investors

Glassnode\'s data is a warning sign for retail and institutional investors. Record surrenders by long-term holders, continued outflows of ETFs and hedging in the options market combine to suggest that the market has not yet reached a clear bottom. Historically, Bitcoin\'s bottoming process has been long and volatile, often taking weeks or months of consolidation to start a sustained upward trend. Investors should be prepared for continued price volatility and potential further declines. The data highlights the importance of risk management and patience as the market is going through the final phase of the current cycle.

Conclusion

Glassnode\'s latest on-chain analysis confirms that Bitcoin is still in the correction stage, with key indicators pointing to an ongoing but unfinished bottoming process. Record surrenders by long-term holders, continued outflows of ETFs and cautious position placement in the options market all suggest that the market has not yet found a clear bottom. Although derivatives traders showed some optimism, the overall situation remains one of continued uncertainty and the possibility of further decline.

FAQs

Q1: What does Glassnode mean by saying that Bitcoin is \"undervalued\"?

This means that Bitcoin is traded at a price below the average cost basis of key investor groups such as long-term and short-term holders. Historically, this has been a signal that asset prices are below their fundamental values as reflected by indicators on the chain, and usually occurs during bear market bottoms.

Q2: Why does surrender matter to long-term holders?

Long-term holders are usually the most resilient investors, so when they sell at a loss (surrender), it usually means that the market is under extreme stress. The record sell-off could indicate that the market is approaching the final wash, but there is no guarantee of an immediate bottom out.

Q3: How does ETF outflows affect Bitcoin prices?

Spot Bitcoin ETFs provide institutional and retail investors with a regulated path to exposure. Net outflows from these funds indicate reduced demand and selling pressure, which may intensify the downward price trend or prolong the bearish trend.