Bitcoin (BTC): Are Near-Term Holders Accountable for Ongoing Downturn?

Bitcoin’s slump towards $18.5K saw the bellwether crypto hitting the 2nd-lowest zone of the bearish cycle. Meanwhile, a recent report by Glassnode shows that 11.8% of the token’s supply is in an unrealized loss.

Moreover, the previous week saw BTC climbing from the mentioned second-lowest level to $21,758. Nevertheless, prices stayed inside the consolidation zone, and Glassnode revealed that the range remained intact for over 90 days.

Near-Term Holders Experiencing Losses

Bitcoin’s price hit the consolidation range’s lower end over the past week. Glassnode considered the token volume in unrealized profit at the $24.5K high, which flipped into unrealized losses. Assessing near-term holders’ Market Value Realized Value presented distressing data.

The numbers registered in the ongoing bear cycle remained lower than during the BTC market capitulation of December 2018.

Glassnode believed that shows Bitcoin near-term holders are experiencing a historically massive financial pain. The report added that the overall supply in losses gained by 11.8% since mid-August to 48.1%.

Also, the analytic firm discovered that near-term holders’ contributions remained substantially high compared to long-term market participants.

According to Glassnode, this indicates capitulation by near-term holders within the marketplace. Also, that could be a matching demand inflow when Bitcoin prices oscillated at $24K – $18.5K last week.

Moreover, it revealed the near-term and long-term holder contribution difference shows risks. That’s because a massive asset volume (48.1%) remains underwater beneath $18.5K. Furthermore, 11.8% of the total supply boasts a cost basis of $18.5K – $24.5K area.

Moreover, Glassnode used the STH SOPR (Short Term Holder Spent Output Profit Ratio) to measure the profitability of Bitcoin’s near-term holder.

The indicator evaluates the profitability and behavior of market players that have joined the market recently. Glassnode discovered that the STH SOPR equated to one during the $24K market rejection. That shows near-term investors sold $BTC on a cost basis.

No More Holding for Long Run

Near-term holders primarily determine the prevailing market condition. These investors are bumping for the lucrative entry-level and any available profit.

Nevertheless, unlike this holder category that influences the marketplace in the short term, long-term Bitcoin investors could be in deep waters. LTHs have already seen a substantial wash-out and will likely leave their assets dormant.

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