This Report Suggests Cryptocurrencies Bearing A Final Flush-Out

The crypto market is currently going through a series of unfortunate events. Since the crash of the stablecoin Land at the fall of Celsius It's been a bleak year for crypto investors.

More recently, the capitulation of the popular FTX exchange led by Bankman-Fried has further amplified this negative trend. Additionally, exchanges like Gemini and Coinbase have laid off a significant portion of their workforce.

According to Glassnode Reports, the FTX collapse has given rise to one of the biggest; Deleveraging events in the history of cryptocurrencies. As a result, the market has fallen in recent weeks. Glassnode emphasized the size of the losses felt by all market players in the deleveraging event.

In the long term, this forced out of prices could prove beneficial for asset prices. However, Glassnode also believes that a capital reset is coming.

How is the crypto market doing?

With current events, the crypto market is down 1.1%. Total market capitalization stands at $892 billion. With fear and uncertainty in the market, resistance levels will be difficult for any asset to overcome.

Most altcoins have remained neutral today, not posting any significant gains or losses. Bitcoin is close to the $17,000 level pulling back from $17,400 in less than 24 hours; Ethereum is back 2%, pulling back to the $1266 level. The cryptocurrency market is currently in a bearish trend with a reduction in market capitalization.

record capitulation

Two massive capitulations reshaped the crypto space in 2022. The events; It happened in June and November. The FTX saga led to a loss of $4.43 billion in one day. Terra's capitulation led to a $700 million deficit in 14 days, as investors withdrew their capital en masse.

Glassnode compared the ratio of realized gains to realized losses, with the latter outperforming the former. According to the data, these losses were fourteen times greater than the gains in the market.

Based on historical data, the previous lows of the similar effect ratio occurred in the fund cycle. Once again, this pattern was seen in the bear markets of 2011, 2015, and 2018.

After these significant losses, a trend reversal occurred after each bear market, leading to a bull market in all three years.

Glassnode stated that the size of the losses had narrowed in recent weeks after the cryptocurrency laundering. Prices are likely to consolidate in the coming months before a significant trend change.

According to CNBC Jim Cramer, investors need to get money out of cryptocurrencies while they can. However, with the recent event creating a negative impression on crypto investing, Cramer stressed that the decision needs to be made sooner rather than later. How investors will react to the laundering and its resulting effects remains a mystery.

Featured Image From Pixabay, Charts From Tradingview.com