Bitcoin Crash Forced Weak Hands Into Largest Loss-Taking Since 2022 Lows: Report

A new report from Glassnode has revealed that the Bitcoin short-term holders took part in the largest loss-taking event since 2022 in the recent crash. Bitcoin Short-Term Holders Have Realized Huge Losses Recently According to the latest weekly report from Glassnode, less than 1% of trading days in the cryptocurrency’s history have seen the short-term holders taking higher losses than during the latest event. The “short-term holders” (STHs) here refer to the Bitcoin investors who bought their coins within the past 155 days. This cohort makes up one of the two main market divisions based on holding time, with the other group being called the “long-term holders” (LTHs). Statistically, the longer an investor holds onto their coins, the less likely they become to sell them at any point. As such, the LTHs reflect the stubborn side of the market, which can weather through crashes and rallies, while the STHs include the weak hands that easily react to FUD or FOMO. Related Reading: Chainlink Traders Capitulate After 10% Plunge: Bottom Here? Given this fact, it’s not unexpected that this latter cohort has again shown a strong reaction to the recent volatility in the Bitcoin price. And since it’s been a crash, the STHs have been panic selling at a loss. The below chart shows the trend in the Bitcoin Realized Loss specifically for the STHs over the past few years: The Realized Loss here is an indicator that keeps track of the total loss the STHs realize through their selling. Also, note that the metric is “entity-adjusted,” meaning that the metric includes the data for entities instead of addresses. An entity refers to a cluster of addresses that Glassnode has determined to belong to the same investor through its analysis. Transactions made between the wallets of the same investor would naturally not correspond to any real “loss-taking,” so excluding them from the data makes sense. As is visible in the graph, the Bitcoin STH Realized Loss registered a spike during the latest market downturn, implying that these investors made large transactions at a loss. At the height of this capitulation event, the indicator’s value hit $595 million, the largest loss-taking the cohort has shown since the FTX collapse that led to the bottom of the 2022 bear market. Related Reading: Bitcoin Now Forming Pattern That Last Led To It Blasting Off “Furthermore, only 52 out of 5655 trading days (< 1%) have recorded a larger daily loss value, highlighting the severity of this correction in dollar terms,” reads the report. From the chart, it would appear that large spikes in the metric have come around at least local bottoms in the price, so this loss-taking event may have also formed another bottom for Bitcoin. BTC Price At the time of writing, Bitcoin is trading at around $58,800, up 3% over the past week. Featured image from Dall-E, Glassnode.com, chart from TradingView.com

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Bitcoin Short-Term Holders Panic Capitulate $2.6 Billion In BTC Crash

On-chain data shows that Bitcoin short-term holders have panic sold $2.6 billion worth of coins in the crash following the new all-time high. Bitcoin Short-Term Holders Have Sent Huge Volume In Loss To Exchanges As analyst James V. Straten explained in a new post on X, Bitcoin short-term holders have shown signs of capitulation during the latest drop in the cryptocurrency’s price. The “short-term holders” (STHs) refer to the BTC investors who bought their coins within the past 155 days. The STHs make up one of the two main divisions of the market, the other one being the “long-term holders” (LTHs). Related Reading: Solana Open Interest Plunges 20%: What It Means For Price Statistically, the longer an investor holds onto their coins, the less likely they are to sell at any point. This means that the STHs, who are relatively new hands, generally sell quickly whenever an asset crash or rally occurs. The LTHs, on the other hand, usually show resilience, only selling at specific points. One way to track whether either of these groups is selling is through the transfer volume they are sending to exchanges. First, here is a chart that shows the trend in the Bitcoin exchange inflow volume precisely for the STHs in loss: The value of the metric appears to have shot up in recent days | Source: @jvs_btc on X As displayed in the above graph, the Bitcoin STHs have transferred around $2.6 billion worth of coins in loss to exchanges in the past day, implying that some members of this cohort have capitulated. This spike is huge, but it’s less than the loss-taking event that took place back during the price drawdown that followed the BTC spot exchange-traded fund (ETF) approval. These loss sellers would be those who FOMO’d into the rally that took BTC to a new all-time high beyond the $69,000 level, but their conviction wasn’t strong enough that they were able to hold past the sharp crash that BTC observed shortly after. The STHs aren’t the only ones who have exited the market in this latest price volatility; it would appear that the LTHs have also done some selling. The difference, however, is that these HODLers have made profits. The chart below shows how the exchange transfer volume for the LTHs in profit has looked like recently. Looks like the value of the metric has registered a sharp spike recently | Source: jvs_btc on X The graph shows that the Bitcoin LTHs have participated in their largest profit-taking event since July 2021, transferring tokens worth $1.5 billion to exchanges. Related Reading: Bitcoin Sets New All-Time High Above $69,000 As Institutionals Show FOMO Thus, it would appear that this recent volatility has shaken up the conviction of even some of the diamond hands, although these HODLers have at least still been rewarded with profits. BTC Price At the time of writing, Bitcoin is trading around the $65,800 mark, up 8% in the past week. BTC has gone through a rollercoaster in the past couple of days | Source: BTCUSD on TradingView Featured image from cdd20 on Unsplash.com, Glassnode.com, chart from TradingView.com

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Whats A Simple Strategy For Buying & Selling Bitcoin? This Analyst Answers

An analyst has revealed a simple strategy for buying and selling Bitcoin using the historical pattern followed by two BTC on-chain indicators. These Bitcoin On-Chain Indicators Have Followed A Specific Pattern Historically In a post on X, CryptoQuant author Axel Adler Jr. discussed a simple strategy for timing buying and selling moves for Bitcoin. The [...]

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Bitcoin Exchange Inflows Mostly Coming From Loss Holders, Weak Hands Exiting?

On-chain data suggests a majority of the Bitcoin exchange inflows are currently coming from investors holding their coins at a loss. Bitcoin Exchange Inflow Volume Is Tending Towards Losses Right Now According to data from the on-chain analytics firm Glassnode, the short-term holders are mostly contributing to these loss inflows. The “exchange inflow” is an indicator that measures the total amount of Bitcoin that’s currently flowing into the wallets of centralized exchanges. Generally, investors deposit to these platforms whenever want to sell, so a large amount of inflows can be a sign that a selloff is going on in the BTC market right now. Low values of the metric, on the other hand, imply holders may not be participating in much selling at the moment, which can be bullish for the price. In the context of the current discussion, the exchange inflow itself isn’t of relevance; a related metric called the “exchange inflow volume profit/loss bias” is. As this indicator’s name already suggests, it tells us whether the inflows going to exchanges are coming from profit or loss holders currently. When this metric has a value greater than 1, it means the majority of the inflow volume contains coins that their holders had been carrying at a profit. Similarly, values under the threshold imply a dominance of the loss volume. Related Reading: Bitcoin Hangs At $26,200: Why This Is A Crucial Support Level Now, here is a chart that shows the trend in the Bitcoin exchange inflow profit/loss bias over the last few years: The value of the metric seems to have observed some decline in recent days | Source: Glassnode on Twitter As shown in the above graph, the Bitcoin exchange inflow volume profit/loss bias has had a value above 1 for most of the ongoing rallies that started back in January of this year. This suggests that most of the exchange inflows in this period have come from the profit holders. This naturally makes sense, as any rally generally entices a large number of holders to sell and harvest their gains. Related Reading: Bitcoin Bearish Signal: NUPL Finds Rejection At Long-Term Resistance There have been a couple of exceptional instances, however. The first was back in March when the asset’s price plunged below the $20,000 level. The bias in the market shifted towards loss selling then, implying that some investors who bought around the local top had started capitulating. A similar pattern has also occurred recently, as the cryptocurrency’s price has stumbled below the $27,000 level. Following this plunge, the indicator’s value has come down to just 0.70. Further data from Glassnode reveals that the bias of the long-term holders (LTHs), the investors holding their coins since at least 155 days ago, have actually leaned towards profits recently. Looks like the indicator has a positive value right now | Source: Glassnode on Twitter From the chart, it’s visible that the indicator has a value of 1.73 for the LTHs, implying a strong bias toward profits. Naturally, if the LTHs haven’t been selling at a loss, the opposite cohort must be the short-term holders (STHs). This group seems to have a heavy loss bias currently | Source: Glassnode on Twitter Interestingly, the indicator’s value for the STHs is 0.69, which is almost exactly the same as the average for the entire market. This would mean that the LTHs have contributed relatively little to selling pressure recently. The STHs selling right now would be the ones that bought at and near the top of the rally so far and their capitulation may be a sign that these weak hands are currently being cleansed from the market. Although the indicator hasn’t dipped as low as in March yet, this capitulation could be a sign that a local bottom may be near for Bitcoin. BTC Price At the time of writing, Bitcoin is trading around $26,400, down 1% in the last week. BTC has struggled recently | Source: BTCUSD on TradingView Featured image from ???? cdd20 on Unsplash.com, charts from TradingView.com, Glassnode.com

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Bullish Signal: Bitcoin Realized Profit And Loss Fall To October 2020 Levels

As the Bitcoin price continues to struggle, some metrics have begun to emerge that could mean that the current bearish trend is only temporary. The realized profit and loss levels for BTC have continued to fall over the last six months and have now hit a level that suggests the start of another upward rally. [...]

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Bitcoin Holders Show No Panic Loss Selling, What Does It Mean?

On-chain data shows that Bitcoin investors aren’t participating in any significant amounts of loss selling right now. Here’s what it may mean. Bitcoin Entity-Adjusted Realized Loss Has Remained Low Recently According to data from the on-chain analytics firm Glassnode, coins transacted recently were mostly acquired close to the current spot price. The relevant indicator here [...]

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Bitcoin Crash To $25,800 Sends 6.5% Of Supply Into Loss

On-chain data shows yesterday’s Bitcoin crash from $27,300 to $25,800 alone sent 6.5% of the supply into a state of loss. Bitcoin Supply In Profit Shrunk Down To 62.5% Following The Price Plunge According to data from the on-chain analytics firm Glassnode, a further 1.26 million coins were lost after the latest price plummet. The relevant indicator is the “percent supply in profit,” which measures the percentage of the total circulating Bitcoin supply currently being held at a profit. The metric calculates this value by going through the on-chain history of all the coins on the network to see what price they were last moved at. If the previous selling price for any coin was less than the current spot value of the asset, then that specific coin is counted inside the profit supply. The counterpart indicator for the percent supply in profit is the “percent supply in loss,” which naturally tracks the loss of supply. This metric’s value can be found by subtracting the percent supply in profit from 100. Now, here is a chart that shows the trend in the Bitcoin percent supply in profit over the last couple of days: The value of the metric seems to have observed some decline recently | Source: Glassnode on Twitter As displayed in the above graph, the Bitcoin percent supply in profit saw a massive plunge as the crash in the cryptocurrency from the $27,300 mark to the $25,800 level took place. The impetus behind this price plunge was the US Securities and Exchange Commission (SEC) suing the cryptocurrency exchange Binance and its CEO, Changpeng Zhao, over alleged fraud. Though even though the price saw a 5.8% plunge during this crash, the percentage of the total circulating Bitcoin supply that was sent into a state of loss measured to around 6.5%. Related Reading: Dogecoin Plunges 7% As Whales Make Large Moves The analytics firm also explained the reason behind this discrepancy; the price range that the asset had previously been trading in was host to many investors’ cost basis (that is, the acquisition/buying price). Looks like the prices that BTC had been trading at before were the center of the largest demand profile | Source: Glassnode on Twitter Since a relatively high percentage of the supply had been bought at those levels, it makes sense that a sharp price move below it would send a significant number of coins into a loss. When Bitcoin had been trading around the $25,800 level, the percent supply in profit had dropped to just 62.5%, while preceding the crash, the indicator had a value of about 69%. This would imply that 37.5% of the supply had been lost after the plunge. Related Reading: Bitcoin Slips Below $26,000, Triggers Over $300 Million In Liquidations Since Glassnode posted the chart, however, the cryptocurrency has recovered, pushing back above the $26,000 level. Naturally, this means that some coins would have returned to a profit state. BTC Price At the time of writing, Bitcoin is trading around $26,100, down 4% in the last week. BTC has sharply risen during the last few hours | Source: BTCUSD on TradingView Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, Glassnode.com

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