Bitcoin’s recent drawdowns are shallow and consistent with past bull cycles: Glassnode
2024-10-10

Recent bitcoin market activity reflects a degree of resilience despite periods of price volatility, according to Glassnode analysts. Drawdowns during this bull cycle remain relatively shallow and continue to follow the patterns observed in previous market uptrends, they added.
Wednesday's Glassnode Onchain Newsletter notes that although there have been recent pullbacks, the bitcoin market’s overall structure remains consistent with historical bull markets, and that this reflects both the resilience of demand and the limited scale of recent corrections.
"Bull market drawdowns remain relatively shallow but in line with historical bull market uptrends, and this highlights both the similarities and the relative resiliency of the current cycle," Wednesday's Glassnode report said.
At the end of September, bitcoin experienced a pullback, dropping from approximately $66,000 to a low of $60,000 by Oct. 3. Following this decline, the price has stabilized to trade within a narrow range between approximately $62,000 and $63,000.
Demand is supporting market resilience
Glassnode’s latest report highlights that while bitcoin has experienced corrections, these are milder compared to previous cycles.
"The maximum drawdown is somewhat shallower than typically seen in prior bull markets," the analysts wrote, suggesting that demand-side dynamics are playing a role in mitigating deeper declines.
Two key metrics highlighted by Glassnode are the True-Market Mean and the Active Investor Price, both of which help estimate the average cost-basis for bitcoin investors during the current market cycle. The True-Market Mean reflects the average price at which bitcoin has been acquired across all market participants over time. The Active Investor Price, on the other hand, focuses specifically on the average cost-basis of investors who have actively traded in recent months. Since the beginning of the year, the spot price has generally stayed above both levels, with only brief exceptions. According to the report, this suggests that a strong support base exists, helping to stabilize the market during price dips.
"Recent market movements show that investor behavior remains robust, with significant demand cushioning the impact of corrections," the analysts added.
Short-term bitcoin holders in focus
According to today's report, a group to watch is the bitcoin short-term holder cohort, defined as investors who have bought bitcoin within the last one to three months. Glassnode says bitcoin’s recent price has reclaimed the critical cost-basis of this group.
"This is an encouraging sign of strength," the analysts stated. "However, if the market fails to hold above this level, it will put these recent buyers under increasing pressure, especially considering the last few months of challenging conditions," the report added. In such a scenario, short-term holders could be forced to sell, potentially driving further volatility.
The analysts highlight a short-term holder indicator, mentioning that the market value to realized value (MVRV) ratio for new investors has increased from its lows observed during the yen-carry trade unwind in early August.
"We can also observe an improvement in the profitability of new investors, with their MVRV ratio rallying from the lows during the yen-carry trade unwind in early August, and it also has reclaimed its 90-day moving average, which is another positive sign," they added.
CryptoQuant cites critical price levels for bitcoin short-term holders
Adding another layer of analysis, CryptoQuant stressed the importance of monitoring the average cost-basis of short-term holders. According to a recent CryptoQuant post on X, short-term holders’ average cost-basis currently hovers near critical support levels.
"We can roughly say that a close above $64,500 would give the bulls strength, however, on the flip side, if the average cost of short-term holders, the 1-3 month holders, at $61,600 is lost, the patience of bitcoin investors will be seriously tested," the CryptoQuant post added.
Bitcoin’s price fell by around 1% in the past 24 hours and was sitting at around $61,705 at 12:37 p.m. ET, according to The Block’s Bitcoin Price Page. The global cryptocurrency market cap stands at $2.27 trillion, reflecting a decrease of 1.5% in the past 24 hours.
Total cryptocurrency trading volume in the past day is $82.7 billion, with Bitcoin dominance at 54.2% and Ethereum dominance at 12.9%, according to Coingecko data.
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