A crypto market cycle has an average life span of four years (1275 days), according to Grayscale’s “Bear Markets in Perspective” report, and a bear market begins when the realized price falls below the market price (the current trading price of an asset).
A crypto market cycle has an average life span of four years (1275 days), according to Grayscale’s “Bear Markets in Perspective” report, and a bear market begins when the realized price falls below the market price (the current trading price of an asset).
Grayscale calculates realised price as the sum of all assets at their purchase price divided by the asset’s market capitalization, allowing it to calculate the number of positions in profit or loss.
Leverage has increased in the current cycle
According to Grayscale, investors became interested in leverage trading after governments increased their spending to shore up the collapsing global economy following the pandemic.
Long Bitcoin positions lasted for more than six months in 2021, according to the firm, as investors became increasingly interested in paying large fees to maintain their positions. It came to a halt, however, when collateral prices began to fall.
The same scenario played out recently, when Terra’s ecosystem collapse and the brief depeg of staked Ethereum exacerbated the lack of transparency in centralised DeFi businesses involved in leveraging (ETH).
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