In its latest weekly report, an on-chain analytics company, Glassnode, draws significant parallels to the current market structure of Bitcoin (BTC) and the sideways consolidation phase of Q1 2022 <a href="https://www.cryptoknowmics.com/news/bitcoin-defies-gravity-as-it-springs-back-above-93000/">Bitcoin</a>. There have been several warning signs in the market, characterized by an accumulation of supply in loss and a compressed supply of long-term holders. The greater the loss of supply at a given time suggests a risky market atomization.

Glassnode observed that Bitcoin’s price is now below the critical levels identified in Glassnode’s supply quantiles cost basis model. From mid-November to date, the price has dropped below the quantiles of 0.75, 0.85, and 0.95, making over 25% of Bitcoin’s circulating supply at a loss in terms of unrealized loss. The loss of supply and market sentiment mimic the behavior observed in the early 2022 quarter, when BTC once again dropped below the 0.75 quantile.
<h2>Loss Supply and Supply Theoretic of Capitulatory Risk</h2>
[embed]https://twitter.com/glassnode/status/1996323045166981220[/embed]

The total supply in loss is an additional metric that supports this comparison. A supply can be considered to be in loss when the current under-valued supply is greater than the supply of Bitcoin that is not. The 7-day moving average of this metric has recently spiked to a value of approximately 7.1 million BTC, an increase and the highest value measured since September 2023.

Glassnode states that the current range of supply in loss between five and seven million BTC supply losses resembles the formation of loss structures adamantly trading in the sideways range in the year of 2022. Losing formations represent high risk and fragile structures that detail headaches of the recent buyers capitulating as they lose money and liquidate, versus exhaustion of sellers tiring of the trade and losing money thus, theoretically creating a bottom to a range on the market.
<h2>Long Term Holders Cashing Out Less Profit</h2>
The Long Term Holder (LTH) Spent Output Profit Ratio (SOPR) metric also reflects a similar market condition to the beginning of 2022. SOPR reflects whether long-term holders, who have had the coins in their possession for over 155 days, realize a profit when they sell.

In the recent weeks as SOPR for LTH has rapidly decreased, the number remains above 1, somewhere around 1.43. This signifies Long Term Investors continue on average to sell their BTC for a profit, however, the LTH SOPR Report notes that these profits, on average, have significantly decreased, thus, trading a profit for a higher loss. This lack of profit is a clear sign of the pressure, lack of indecision, and caution that is surrounding the market for BTC.

Glassnode Draws 2022 Comparisons as Bitcoin’s Metrics Signal Consolidation

On-chain analysis from Glassnode shows Bitcoin is below key profitability levels, with over 25% of supply in loss—a pattern seen in early 2022.

Glassnode Draws 2022 Comparisons as Bitcoin’s Metrics Signal Consolidation

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