Blockchain data intelligence platform Glassnode released a research piece that says 2022 has been the most significant bear market in the history of cryptocurrencies.
Glassnode mentions that this year has been tough for BTC and Ether as valuations have been hitting hard and fast. It has been historically challenging for financial markets overall with equities, bonds, and digital assets facing tightening monetary conditions as a result of inflation and tightening liquidity in the economy. Mostly, markets have been impacted by highly leveraged funds, Glassnode says.
The bear market is significant as first in history both Bitcoin and Ether fell below their previous cycle's all-time highs. Investor losses have been considerable with all 2021-2022 investors now being underwater. Along with this, the number of investors liquidating their holdings has been growing.
Bitcoin's current decline by 73% below its all-time high of around $68,700 reached in November 2021 and the duration between 227-days and 435-days makes the bear market stand out within historical norms and magnitude.
Similar to Bitcoin, Ethereum investors in 2021-22 are now holding an unrealized loss. A large proportion of this was driven by a massive deleveraging in DeFi. Ether is trading well below its 200-day Moving Average. The coin's price is 74% down from its ATH of $4,890. Data shows that the last 6 months has seen the two largest statistical capital destructions in the history of Ethereum with a total of $27.6 B in the net outflows from the Realized Cap.