The Plight of Bitcoin Holders: More Investors in the Red
Bitcoin (BTC) has been facing a difficult time recently, with its price plummeting to $25,000 last week and remaining stagnant around $26,000 since then. It was the worst week for Bitcoin since the FTX crash in November. As a result of the declining Bitcoin price, more investors are experiencing losses, especially those who are relatively new to the market.
The Number of Investors in the Red
According to the well-known on-chain analysis platform, Glassnode, its weekly research report discusses the number of investors who are either in profit or in loss.
Glassnode revealed that 12.8% of the total circulating BTC supply, equivalent to 2.4 million BTC, incurred unrealized losses last week. Before the massive drop in price on Thursday night, 73.3% of all coins in circulation were still in profit.
Long-Term Holders Remain Silent
Glassnode observed that there was almost no activity from the long-term holders in response to the price decline. Investors are considered long-term holders if they have held their coins for a minimum of 155 days. Conversely, if coins are held for less than 155 days, investors are classified as short-term holders.
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Glassnode also noted that the volume of coins sent to crypto exchanges by long-term investors was not significant. In fact, the total balances of these committed investors reached a new record this week.
The Difficulties Faced by Short-Term Holders
It is the short-term investors who are currently facing the brunt of the market decline. This group holds a total of 2.56 million BTC, of which only 300,000 BTC (11.7%) is still in profit. A staggering 88.7% of this group is currently in the red.
Increase in Coins Sent to Exchanges
According to the blockchain analytics company, there has been an increase in the flow of coins from short-term holders who are currently in a loss position to exchanges. This phenomenon, known as “loss dominance,” reached its highest point last week since the price crash in March to $19,800.
It is not surprising that this group of investors is sending more coins to exchanges. Generally, coins are sent to exchanges for the purpose of selling them on the market. Short-term holders are newcomers to the market and statistically have a higher probability of selling their coins during market volatility.
The recent decline in the Bitcoin price has put many investors, particularly short-term holders, in a difficult situation. While long-term holders remain relatively calm, the influx of coins from short-term holders to exchanges indicates their unease. It is crucial for investors to carefully evaluate market conditions and make informed decisions to mitigate potential losses and navigate the volatile cryptocurrency landscape.
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Bitcoin, BTC, Glassnode, Investors, Loss