The 2022 Bear Market

By the end of 2022, Bitcoin had fallen from its $69,000 peak to around $16,000. A 77% decline. The Luna collapse and FTX implosion had hammered sentiment across the entire market.

But the on-chain data showed something interesting.

Throughout 2022, the percentage of Bitcoin that hadn’t moved in over a year kept climbing. Long-term holders — the wallets showing no outflows through the crash — accumulated steadily as prices fell. The people who understood what they held were buying, not selling.

This is measurable on the blockchain in a way no other asset allows. Because every transaction is public, analysts can track which coins have moved and which haven’t. The 2022 bear market produced a clear picture: short-term holders sold, long-term holders accumulated.

A metric called MVRV — Market Value to Realised Value — which measures how far the current price is from the average price all holders paid, reached levels in late 2022 that had historically marked cycle bottoms. People who tracked this data were buying when the headlines were most negative.

This isn’t guaranteed to repeat. Historical patterns don’t always continue. But the 2022 data was consistent with every previous Bitcoin cycle: the people who had done the intellectual work, held through the pain, and bought during the fear — tended to fare better than those who made decisions based on price and sentiment.

Tomorrow: the Bitcoin halving — what it is and what history shows.

— The Daily Bit