Long-term Bitcoin holders are sitting on their largest losses since the March 2020 capitulation and the 2018-2019 bear market but may have to keep waiting for relief.
Calculated by measuring the value of coins deposited to exchanges, aggregated realized losses from long-term holders (LTH) of Bitcoin (BTC) exceeded 0.006% of the market capitalization by May 29 according to Glassnode’s The Week Onchain report from June 6.
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However, the dramatic losses may continue for some time if historic loss patterns from previous bear markets are to be repeated. From 2018 to 2019, LTH losses reached a peak of 0.015% of the market cap, and those losses extended for about a year. The current losses to long-termers have only been observed for about a month.
Glassnode writes that LTH losses now resemble those from previous bear markets, but that they need to continue for a longer period of time before being truly comparable. The report states:
“The LTH losses on coins deposited to exchanges have now reached a magnitude comparable to previous bear markets. However, we do not yet have the duration component.”
Glassnode defines LTH as a holder that has not moved their coins for at least 155 days. However, anyone that bought BTC before December 2019 will still be up on their investment … for now.
It is also worth noting that in both 2019 and 2020, prices rapidly recovered by bouncing off their lows. Cointelegraph reported on Tuesday that there will likely be a capitulation event before any significant price recovery can take place.
Despite the gloomy price outlook, inflows to digital asset investment products such as Bitcoin exchange-traded funds (ETF) topped $100 million last week. CoinShares June 6 report highlights that most of the inflows were from the Americas, suggesting that European investors are still bearish at the moment.
Related: Amid crypto bear market, institutional investors scoop up Bitcoin: CoinShares
CoinShares also pointed out the difference in exchange flows between BTC and Ethereum (ETH). BTC exchange inflows have netted about $506 million in value through 2022 so far, whereas ETH has had net outflows of $357 million. This suggests that market sentiment for ETH is much lower than that for BTC at the moment.
Bitcoin prices are down 5.3% over the past 24 hours, trading at $29,567 according to data from CoinGecko. Ethereum is down 6.7% over the same period, trading at $1,756 having lost 34% over the past month.
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