The Bitcoin selloff from Thursday to Saturday marked the largest realized loss ever for the top cryptocurrency by market cap, with investors recording $7.3 billion of locked-in losses.
About 555,000 Bitcoin were traded in the $18,000 to $23,000 range during the three-day span, with many sellers having originally purchased BTC at much higher prices, according to research firm Glassnode.
Short-term holders reached a Spent Output Profit Ratio equal to that of the 2018 bear market, meaning their profits are down overall, while some long-term holders experienced “deep capitulation” after buying at Bitcoin’s all-time high of nearly $69,000 and selling for closer to $18,000, per Glassnode.
The last three consecutive days have been the largest USD denominated Realized Loss in #Bitcoin history.
Over $7.325B in $BTC losses have been locked in by investors spending coins that were accumulated at higher prices.
“Almost all wallet cohorts, from Shrimp to Whales, now hold massive unrealized losses, worse than March 2020. The least profitable wallet cohort hold 1-100 BTC,” Glassnode reported.
GlobalBlock cryptocurrency analyst Marcus Sotiriou said 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%.
Finally, we can see that as prices hit the $17.7k lows yesterday, just 49% of the $BTC supply was in profit.
Historical bear markets have bottomed and consolidated with between 40% and 50% of supply in profit.#Bitcoin investor conviction is seriously being put to the test
“It is important to note when looking at this historical data, that Bitcoin has not gone through a period of persistent inflation,” Sotiriou said in a statement Monday. “We may be edging closer to a generational bottom as more forced liquidations occur, but we can not be confident of a sustained uptrend until inflation convincingly slows down.”
Yuya Hasegawa, an analyst at Japanese cryptocurrency exchange Bitbank, also sees more potential downside given that Bitcoin’s PSP is just above 50%.
“Bitcoin’s weekend dip was, to put it simply, not deep enough,” Hasegawa wrote in a report Monday. “Bitcoin still has a downside potential but if its PSP goes below 50%, then the price could finally bottom out.”
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