On-chain analytics firm Glassnode made a startling reveal on the markets after the SEC filed its lawsuit against the Coinbase and Binance crypto exchanges.
The market saw a wave of volatile moves shortly after SEC announced its lawsuit against the two biggest exchanges, which resulted in outflows.
Following a crescendo in US regulatory pressure on major cryptocurrency Exchanges #Binance and #Coinbase, the market experienced significantly volatile moves in both directions.— glassnode (@glassnode) June 7, 2023
However, the magnitude of Realized Losses recorded On-Chain remains quiet at $112M. This remains… pic.twitter.com/ppE8Dennbh
Glassnode notes that despite the significance of this turn of events and its anticipated implications, the magnitude of realized losses remains largely lower.
The on-chain analytics firm notes that the magnitude of realized losses recorded on-chain remains quiet at $112 million. This is about 96.5% less, or -$3.05 billion, than the largest recorded capitulation event. It adds that this suggests an increased degree of resilience among market participants.
On June 6, Glassnode reported that Binance exchange outflows remain about 74% lower than the peak net outflow of -40,300 BTC.
True to this, Bitcoin, the largest cryptocurrency by market capitalization, surprised the market by nearly erasing all losses it had accrued earlier. Bitcoin is currently up 3.4% on the day, trading at $26,646.
Here are levels to watch
Will Clemente, a top Bitcoin analyst, made an interesting comment on Twitter: "Bottoms are often marked when price no longer negatively reacts to bad news; tops are often marked when price no longer positively reacts to good news."
He adds that Bitcoin is trading as "if the majority of those who were going to panic sell over the last 1.5 years have already done so."
In the wake of the recent uncertainty on the markets inspired by the Binance and Coinbase SEC charges, Glassnode highlights key Bitcoin support levels to watch.
The Bitcoin spot price continues to find strong support at some key price levels: the short-term holder cost basis at $26,300, the adjusted realized price at $25,300 and the 200-weekly moving average (WMA) at $26,400.
Glassnode adds that sustained duration above these levels would continue to be a constructive signal regarding the prevailing trend.