In its weekly onchain report, Glassnode highlights that bitcoin (BTC) has risen above the short-term holder cost basis of $61,900 and the 200-day moving average (MA) at $63,900. This recovery, the report notes, follows a 0.5% interest rate reduction by the U.S. Federal Reserve.

While new investors continue to experience unrealized losses, Glassnode researchers, including Cryptovizart and Ukuria OC, point out that the losses are far less severe than those seen during previous downturns, such as the March 2020 crash. This suggests that market participants retain confidence in Bitcoin’s long-term prospects.

The report states:

New investors show a degree of resilience, seen in realized losses being of a relatively small magnitude, suggesting confidence in the overall uptrend.

The findings also shed light on capital inflows and outflows, a critical indicator of market sentiment. Despite recent price declines, the flow of capital remains moderately positive, particularly among newer market participants.

Source: Glassnode’s The Week Onchain: “Tracing Capital Flows.”

According to Glassnode, the cost basis of younger bitcoin (BTC) holdings (one week to one month old) has started to decline at a slower rate than those in the one to three-month range.

“Despite many new investors being underwater on their holdings, the magnitude of their unrealized losses are notably less severe than the mid-2021 sell-off, and the March 2020 COVID crash,” the Glassnode researchers explain.

Perpetual futures markets also provide insights into investor sentiment. While the funding rate remains below levels seen during bull markets, Glassnode observes a modest uptick in long-biased leverage. The funding rate has increased from $1.7 million per month in mid-September to $10.8 million today.

“Demand for long-leverage has increased over last two weeks, but is still considerably lower than it was in January 2023,” the report details. “This speaks to a market which has cooled off significantly during this correction.”