Bitcoin’s ‘Black Monday’ and everything about the final decline

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Bit­coin, the largest cryp­tocur­ren­cy is dis­play­ing a few pos­i­tive signs above the $20,000 sup­port. At press time, BTC show­cased a 5% surge as it trad­ed around the $21k mark. Although, the risk is still at large as on-chain data showed that investors over the past three-day peri­od exit­ed posi­tions who acquired BTC at much high­er prices.

Rock bottom preview

Bit­coin mar­ket par­tic­i­pants stood near his­tor­i­cal­ly high finan­cial pain thresh­olds. Investors exit­ed Bit­coin posi­tions worth a record $7.3 bil­lion over the past three days as per ana­lyt­i­cal firm, Glassnode. In fact, the last three con­sec­u­tive days record­ed the largest USD-denom­i­nat­ed Real­ized Loss in BTC’s history.

Source: Glassnode

As Bit­coin price crashed, investors quick­ly sold off rough­ly 555,000 BTC in the $23,000-$18,000 price range as many sell­ers had orig­i­nal­ly pur­chased BTC at much high­er prices, accord­ing to research firm Glassnode. Here, loss­es ranged between $1.5 bil­lion and $2 bil­lion each day.

Source: Glassnode

What about the ‘loyal’ holders?

Even the long-term hold­ers part­ed their ways with the king coin. Notably, this includ­ed 178,000 BTC held by Long Term Hold­ers (LTH), with some of the coins sold acquired at $69,000 – the price that marked Bitcoin’s all-time high in Novem­ber 2021. This group of sell­ers took a ‑75% hit to their investment.

Addi­tion­al data from the ana­lyt­ics firm shows that long-term hold­ers (LTHs) also took a deep capit­u­la­tion dur­ing this record loss taking.

In addi­tion to this, Short-Term Hold­ers (STH) too took on heavy loss­es. The STH-SOPR reached lev­els equiv­a­lent to the Novem­ber 2018 bear mar­ket capit­u­la­tion event.

Source: Glassnode

Almost all wal­let cohorts, from ‘Shrimp to Whales’, held on to mas­sive unre­al­ized loss­es, worse than March 2020. Cur­rent­ly, the least prof­itable wal­let cohort holds 1–100 $BTC and has unre­al­ized loss­es equal to 30% of the mar­ket cap. To add to this grim sce­nario, BTC falling below the 2017 $20k ATH, gave rise to anoth­er narrative.

Bit­coin may be near a tem­po­rary bot­tom­ing out point because the cryp­tocur­ren­cy has his­tor­i­cal­ly bot­tomed out when its Per­cent Sup­ply in Prof­it (PSP) is 40% to 50%.

Source: Glassnode

Need­less to say, in such a con­di­tion, BTC investors’ con­vic­tion is seri­ous­ly being put to the test.



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