Bitcoin fell below $32,000 Monday amid a massive sell-off in stocks and cryptocurrencies.
Bulls are now looking at July 2021 price levels, and on-chain data suggests more pain, as the BTC/USD value has fallen more than 7 percent in 24 hours.
BTC price slip means 10% supply goes into the unprofitability area
BTC has been losing more money as it is being sold alongside stocks. Glassnode’s on-chain analysis platform has revealed that the volatile drop to prices below $33k has caused an additional 10% in Bitcoin supply to go into red.
Glassnode last week highlighted how a decline to $33k in the bottom line would cause more people, particularly short-term traders, into unprofitability.
Bitcoin was then at $38k. However, the dips over the past few days seem have scared a large group of short-term holders, even though stocks were sold to take advantage of the wider risk-on market.
“Bitcoin bulls remain under pressure this week, as prices fall back to $33.8k, and network profitability falls by ~10%. Weakness has appeared across ETF product flows, stablecoin supply contraction, and in investor urgency to deposit coins to exchanges, largely in response to downside volatility,” the firm wrote in its weekly newsletter.
There is more pain.
Bitcoin is now more than 53% below its November high of $69k.
First, the slump seen in July 2021 sent BTC to a price level that was 54.2% off its ATH. Even more severe were the bear markets of 2015, 2018, and March 2020. Bitcoin lost 77.2% and 85.5% respectively from their all-time highs.
Network profitability has dropped to around 60% with the latest slump in BTC price pushing the flagship cryptocurrency to a ‘pain threshold’ similar to previous bear markets. The profitability levels are comparable to those in the 2018-20 bear market.
“However it should be noted that both instances were prior to the final capitulation flush out event,” the firm’s analysts added in the report.
HornHairs, a crypto trader and analyst believes that there is no bottom and that there is more pain.
“Looking at the average time from cycle highs to cycle lows, as well as the average time cycle lows occur before the next halving, September-November of this year would be the most historically similar to previous cycles, in terms of time span, for a bottom to form.”
Chart showing the historical price movements of Bitcoin. Source: HornHairs on Twitter.
Michael van de Poppe, a professional trader and crypto analyst, suggests that investors pay attention to the current BTC prices. In his view, the area could provide for a “bounce play.”
#BitcoinThis level is worth keeping an eye on.
The stock has not bounced to $37.5K but has been taking all liquidity below the lows in 2022, and that should be a bounce. pic.twitter.com/GMsToZTZMN
— Michaël van de Poppe (@CryptoMichNL) May 9, 2022
Bitcoin traded at $31,580 Monday afternoon. This was nearly 7.5% lower than the previous 24 hours.