Bitcoin Short-Term Holders Navigate Rough Seas as 83.7% Incur Losses
Key Insights:
- 83.7% of short-term Bitcoin holders struggle with unrealized losses, says Glassnode.
- Long-term holders weather the storm, showcasing increased profitability.
- Upcoming economic indicators contribute to market caution, yet Bitcoin shows signs of mild bullish momentum.
According to Glassnode, a leading data analytics firm, most short-term Bitcoin holders sail through stormy waters. 83.7% of these holders are grappling with unrealized losses.
A Tough Time for Short-Term Bitcoin Investors
Investors new to Bitcoin, particularly those holding their coins for less than 155 days, find it challenging to stay afloat. Glassnode’s recent weekly report is a wake-up call for this group. Only 16.3% of these short-term holders are experiencing any profit, leaving the rest underwater. The findings come from the “supply in loss” metric, which has sharply increased lately.
To obtain this data, Glassnode delves into the on-chain history of each Bitcoin, determining the last price at which it was transferred. If the present price is lower than this number, the coin is considered to be incurring an unrealized loss. The uptick in the number of coins in this category directly results from Bitcoin’s recent price decline. This downturn has led to many investors seeing their investments valued below the price they initially paid, making the situation increasingly precarious.
Following is a graph that depicts the historical trend in the percentage of supply in profit for this specific group in the cryptocurrency’s timeline:
BTC Short-Term Holder Percent supply in Profit (Source: glassnode)
Smooth Sailing for Long-Term Bitcoin Investors
In contrast to their short-term counterparts, long-term Bitcoin investors are faring much better. The data shows that the profitability of this group, who have held their coins for more than 155 days, has increased. This phenomenon is rooted in the time delay attached to this cohort. Coins purchased around five months ago are now joining the ranks of the long-term holders, and these coins were bought at lower prices. As a result, these investments remain profitable, providing a glimmer of hope in an otherwise murky landscape.
BTC Long-Term Holder Percent supply in Profit (Source: glassnode)
Bitcoin Price Analysis
Bitcoin (BTC) has seen a modest uptick, with its current price at $26,193, marking a 1.35% increase for the day and a 1.26% gain over the week. This price activity has led to an 11% decline in trading volume, now at $15.9 billion.
BTC/USD 1-day price chart (Source: CoinMarketCap)
Indicators like the Bollinger bands reveal a narrowing gap, signaling low price volatility for Bitcoin. Meanwhile, the Relative Strength Index (RSI) is hovering above the midpoint, suggesting bullish momentum is taking hold. The MACD also supports this sentiment, as it has entered positive territory, indicating a mild bullish impact on Bitcoin’s price.
Macroeconomic Variables Lean Toward Caution, Yet BTC Optimists Hold Steady
Cryptocurrency traders are erring in caution when facing upcoming economic indicators such as the Consumer Price Index on September 13 and retail sales figures on September 14. Many are likely to opt for what has been the prevalent trading range for Bitcoin, oscillating between $25,500 and $26,200.
On a more hopeful note, the unshaken derivatives markets during Bitcoin’s slide below $25,000 imply that all may not be lost. In basic terms, a surge in bearish activities like put options and negative Bitcoin futures premiums would accompany firm conviction in a downward market trend.
The future remains uncertain because Bitcoin’s price is susceptible to unpredictable factors like legal developments and ETF decisions. This collective ambiguity might contribute to the enduring stability in derivatives indicators, as traders from both camps exercise restraint to mitigate undue risks.
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