Decentral Block Post

Bitcoin (BTC) spending an “unprecedented” period below a key moving average is a poor guide to the 2022 bear market.

That was the opinion of analyst Superswell, who this week championed on-chain metrics as a way of understanding current BTC price action.

“Business as usual so far” for Bitcoin bear market

In a series of tweets on Dec. 5, Superswell challenged those concerned about the 200-week simple moving average (SMA) disappearing as support on BTC/USD.

“Over the last few months, I've seen quite a few people point out that BTC failing to find support at the 200wkSMA is unprecedented and therefore we're in uncharted territory - especially considering how much time we have spent below,” part the thread read.

“This is where I personally feel that onchain data provides better information as to where we are in relation to historical capitulations than TA (ie: 200wkSMA).”

Silvergate Capital CEO Alan Lane has slammed “short sellers” and “other opportunists” for spreading misinformation over the last few weeks — just to score themselves a quick buck. 

In a Dec. 5 public letter, Lane said there was “plenty of speculation – and misinformation” being spread by these parties to “capitalize on market uncertainty” caused in part to FTX’s catastrophic collapse in November.

His crypto-focused bank was recently forced to deny one of these so-called FUD (fear, uncertainty and doubt) campaigns last week when there was speculation that the firm was exposed to the bankrupt crypto lender BlockFi.

Lane also used the latest letter to the public as an “opportunity to set the record straight” about its investment relationship with FTX, as well as the company’s “robust risk management approach.”

Lane reiterated that the firm complies with the Bank Secrecy Act and the USA PATRIOT Act, which requires it to monitor and scrutinize “each and every account,” including FTX and Alameda research.

Bitcoin (BTC) price is showing notable resilience at the $17,000 level, and according to data from Glassnode, a number of metrics that track the pace of selling and the on-chain behavior of investors are beginning to show a reduction in the factors that trigger sharp sell-offs.

The FTX bankruptcy fueled a historic sell-off resulting in $4.4 billion in realized Bitcoin losses. By analyzing realized losses with the daily weighted average metric, Glassnode analysts found that the on-chain losses are subsiding.

According to Glassnode, Bitcoin hit an all-time low in the realized profits versus losses ratio. Toward the end of the most recent bull market, realized losses were 14 times larger than profits, which historically coincided with a positive market shift.

The on-chain data also shows realized losses are declining and Bitcoin price is above the balanced price and realized cap is dropping, removing excess liquidity generated from over-leveraged entities. 

Realized cap suggests excess liquidity is drained

The realized cap is the net sum of Bitcoin capital inflows and outflows since BTC’s launch.