The Largest Investors’ Realized Loss in Bitcoin History Just Happened, But There’s Good News

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The blood­bath that brought BTC down from $21,000 to below $18,000 dur­ing the week­end has result­ed in the largest USD-denom­i­nat­ed real­ized loss for bit­coin investors. Inter­est­ing­ly, long-term hold­ers were among the most active sell­ers, some of which real­ized loss­es in excess of 70%.

Largest USD-Denominated Realized Loss Streak

After reg­is­ter­ing the longest neg­a­tive streak in terms of week­ly can­dles in the red a few weeks back, BTC’s ongo­ing bear­ish run has anoth­er adverse record – this time for investors real­iz­ing losses.

Accord­ing to data from Glassnode, BTC hold­ers “locked” over $7.3 bil­lion in loss­es from Fri­day to Sun­day, which is now the “largest USD denom­i­nat­ed real­ized loss in bit­coin his­to­ry.” This came amid the asset’s plunge from $21,000 to an 18-month low of $17,500 in the same timeframe.

The ana­lyt­ics firm informed that around 555,000 BTC had changed hands between $18,000 and $23,000. Some­what expect­ed­ly, short-term hold­ers sold out sub­stan­tial quan­ti­ties, with STH-SOPR “reach­ing lev­els equiv­a­lent to the Nov 2018 bear mar­ket capit­u­la­tion event.”

In fact, such investors real­ized more loss­es on only three occa­sions in the past five years – at the start of the 2018 bear mar­ket, the COVID-19-induced crash in March 2020, and from May to July 2021.

What’s per­haps more sur­pris­ing about the week­end sell-off is the behav­ior of long-term hold­ers. Glassnode said such investors dis­posed of 178,000 BTC at prices below $23,000, some of which reg­is­tered mas­sive 70%+ loss­es. Their aggre­gate bal­ance has declined to Sep­tem­ber 2021 lev­els since they sold off around 1.31% of their total holdings.

But the (Possibly) Good News?

With bit­coin dump­ing all the way down below $18,000, Glassnode not­ed that the per­cent­age of the asset’s sup­ply in prof­it had declined to 49%. His­tor­i­cal­ly, bear mar­kets have bot­tomed with this per­cent­age drop­ping to some­where between 40% and 50%, which could indi­cate that the bot­tom could be in for the cur­rent correction.

The ana­lyt­ics resource out­lined the impor­tance of these lev­els now and added, “Bit­coin investor con­vic­tion is seri­ous­ly being put to the test” now.

It’s worth not­ing that BTC has already shown some pos­i­tive signs, recov­er­ing over $3,000 in a day as it cur­rent­ly hov­ers over $20,000.

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