Bitcoin prices fell from their highs of $30,000.00 this week to drop below the critical $20,000 mark this week.
According to Glassnode, the sell-off resulted in realized losses of more than $4.23 billion for Bitcoin investors in US dollars. They are historical figures – probably as Bitcoin has fallen from new heights unlike before.
Per the platform’s latest on-chain report, the on-going sell-off saw both short term holders and long term holders sink into unprofitability – the losses being three times larger than what the market experienced in March 2020.
“Bitcoin investors have locked in the largest USD denominated Realized Loss in history last week. This week’s $BTC spend on-chain resulted in net losses of $4.23B. This eclipses all major sell-offs in 2021, and is 3x larger than March 2020,” Glassnode tweeted on Thursday.
#BitcoinInvestors have secured the largest USD-denominated Realized Loss in History last week.
The $BTCSpending on-chain this week resulted in net losses exceeding $4.23B
This surpasses all major 2021 sell-offs and is 3x greater than March 2020.
— glassnode (@glassnode) June 16, 2022
Short term investors lose 0.01% Market cap/day
Glassnode states that short term holders (the new traders and entrants into the market) were aggressively sold this week.
However, these net losses were only 0.01% of the Bitcoin market cap per daily and pale in comparison to the significant drawdowns that have been recorded over the last five years. STHs suffered a loss of 0.02% in market cap due to the sharp fall in Bitcoin price between March 2020 and March 2020.
In 2021-2022 cycle, long term holders will face their first capitulation
A long term holder (LTH) refers to Bitcoin supply that hasn’t moved for the past 155 days or more. This group of wallets have greater conviction on BTC’s long term value and thus rarely sell.
According to the Glassnode report, this cohort of holders has net realized losses equaling 0.007% of market cap each day – “as large as March 2020.”
“Bitcoin Long-Term Holders however realized major losses, equal to 0.007% of the Market Cap per day. This is almost as large as March 2020, and is the first major LTH capitulation event in the 2021-22 cycle.”
At the time of writing, BTC/USD was priced at $21,260. This is 2.6% higher than the previous 24 hours. Peter Brandt, a veteran trader says BTC will see a relief rally. However, he is skeptical and expects more pain.
— Peter Brandt (@PeterLBrandt) June 16, 2022