The crypto market has undergone a predicted correction following a three-week rally, with total market capitalization declining by 3% in the past 24 hours. The second largest digital asset, Ethereum (ETH), has dropped approximately 5% in the last day, trading at around $1,554 on Wednesday.
Additionally, over $227 million has been liquidated in the crypto market in the past 24 hours. However, on-chain data suggests that there may be further pain in the near-term future.
According to on-chain analytics firm Glassnode, short-term holders and Bitcoin miners are heavily selling their positions during the relief rally. Despite this, long-term holders are experiencing all-time high levels of Bitcoin accumulation, leading to a fierce tug-of-war between bulls and bears.
Reportedly, on-chain data shows a significant resemblance between the 2018/2019 bear market to the 2022 one. Nonetheless, the macroeconomic factors have significantly changed and the crypto market is no longer reliant on the speculative aspects.
“The recent surge in Bitcoin price action has resulted in an initial breakout above all three cost-basis for the first time since the 2018/19 bear market and the March 2020 Covid crisis. A sustained duration above these key psychological levels would be considered constructive,” Glassnode indicated.
What is the point of return for the crypto markets?
Following the recent crypto rally, many coins have regained their pre-FTX trading levels. However, the impact of the FTX and Alameda collapse is still being felt, as evidenced by Genesis Trading, a subsidiary of Digital Currency Group (DCG), recently succumbing to the losses.
Popular market economist Peter Schiff predicts that the Bitcoin price will soon fall below previous low levels. Schiff believes that the crypto market, including Bitcoin, is headed for a prolonged period of decline.