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Evaluating the 2022 bear market to 2018


Not all bear markets are created equal and the identical will be mentioned when evaluating the 2018 crypto bear market, and the present 2022 bear market.

Change BTC stability 2018-2019

bitcoin exchange net position change
Bitcoin: Change Internet Place Change – All Exchanges (Supply: Glassnode)

Following the height of the bull run in Dec. 2017, Bitcoin (BTC) worth dropped beneath $10,000, and what adopted from Jan. 2018 to This fall 2019 was a big influx of BTC onto exchanges.

Beginning with round 1.7 million BTC on exchanges in Jan. 2018, by the top of 2019 exchanges held an estimated 3 million BTC.

Bitcoin balance on exchanges
Bitcoin: Steadiness on Exchanges – All Exchanges (Supply: Glassnode)

Change BTC stability 2022

In contrast to its 2018 predecessor, the bear market of 2022 has proven itself to be a totally totally different animal. By 2022, an unprecedented quantity of BTC has left exchanges numbering within the lots of of 1000’s at a time on events.

Bitcoin: Change Internet Place Change – All Exchanges (Supply: Glassnode)

Previous to the aftermath of the FTX collapse, a complete of round 300,000 BTC started to go away exchanges beginning in the beginning of June 2022. Following the collapse, this uptrend of BTC elimination from exchanges solely accelerated because the mantra ‘not your keys, not your cash’ took maintain.

Bitcoin: Steadiness on Exchanges – All Exchanges (Supply: Glassnode)

The height of the 2018 bear market lasted for round 136 days and noticed a fall in BTC worth of over 80% from its all-time excessive (ATH). When in comparison with BTC worth now – down by round 76% from it’s all-time excessive (ATH) during the last couple of days – chart patterns recommend the height of the 2022 bear market could also be right here.

Worth drawdown from ATH: (Supply: Glassnode)

The Introduction of Derivatives

A stark distinction between the 2018 bear market and the 2022 is the introduction of derivatives to the cryptocurrency market.

With the introduction of futures and choices in 2021, derivatives have since been a basic side of the crypto market – making up an enormous quantity of the crypto ecosystem. Constructed upon $2.5 trillion of derivatives, the worldwide banking system evidences the sheer magnitude derivatives must play within the crypto ecosystem — and the impression they’ll and do make.

Futures perpetual funding fee: (Supply: Glassnode)

When analyzing earlier bear markets, Cryptoslate have discovered that the underside is in when shorts change into so aggressive that BTC worth gained’t go down any additional. This has been seen in earlier bear market bottoms, the Covid-19 pandemic fallout, China’s crypto ban of summer time 2021, with the Luna crash, and now with the collapse of FTX.

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