Crypto faces largest downtrend of cycle, says Glassnode

As cryptocurrency markets face their biggest decline of the cycle, long-term investors are increasingly holding on to their assets, analysts say.

Bitcoin (BTC) is grappling with its most significant downtrend of the current cycle, but recent data suggests a shift toward a more patient and resilient investor base. According to a Glassnode report dated August 13, the market is experiencing its “most significant downtrend of the cycle” following a prolonged period of aggressive allocation by investors.

Despite challenging conditions, there is a growing trend among long-term investors to hold on to their assets rather than sell them, signaling a shift in investor behavior toward “holding.”

Bitcoin’s trend accumulation score by cohort | Source: Glassnode

The Accumulation Propensity Score, which measures accumulation patterns across the market, has reached 1.0, the highest possible value indicating a return to accumulation. Glassnode reports that this group has now “returned to a preference for HODLing, with a total volume of +374,000 BTC moving into LTH status over the past three months.”

Bitcoin price remains strong despite sell-off

Despite the aggressive sell-off between April and July, Bitcoin’s spot price managed to stay above its Active Trader Cost Basis, indicating continued strength in the market, according to the blockchain research firm.

Bitcoin’s spot CVD metric | Source: Glassnode

The report also highlights that the adjusted Spot Cumulative Volume Delta metric is negative, reflecting persistent net sell-side pressure. However, the LTH Sell-Side Risk ratio remains “at a lower level” compared to previous all-time highs, meaning the magnitude of the profits realized by the LTH cohort is “relatively small compared to previous market cycles,” Glassnode said.

“This also means that this group is waiting for higher prices before increasing distribution pressure,” the company added.

Glassnode outlined that with Bitcoin’s price hovering around $60,000, investors are waiting for “higher prices” before adjusting their holdings, suggesting a patient, long-term outlook despite the ongoing volatility.