Short-Term Holder Supply in Loss Surges as Bitcoin Price Slides

Bitcoin’s Short-Term Holders Underwater After Price Slide

Recent data shows that short-term holders of Bitcoin (BTC) are facing unrealized losses after the cryptocurrency’s price decline. Around 88.3% of the supply controlled by short-term holders, who hold their coins for less than 155 days, is now in unrealized losses. This means that out of the 2.56 million BTC held by short-term holders, approximately 2.26 million BTC were acquired at a higher cost than the current market rate. Glassnode’s weekly newsletter points out that sharp upticks in short-term holder supply in loss tend to follow “top heavy markets” such as May 2021, Dec 2021, and this week. The flow of short-term holder-owned coins into exchanges has also increased, indicating potential liquidation.

Key Points:

88.3% of the Bitcoin supply controlled by short-term holders is in unrealized losses.
Sharp upticks in short-term holder supply in loss tend to follow “top heavy markets”.
Short-term holders are moving their coins to exchanges, potentially for liquidation.
The current market setup for BTC is fragile due to underwater short-term holders.
The spot-ETF narrative for Bitcoin has shifted to delayed approval amid rising bond yields and tighter liquidity conditions.

According to Ilan Solot, the unrealized losses of short-term holders are a critical problem for the market. Around 90% of short-term holders are facing unrealized losses, which often leads to selling pressure. The spot-ETF narrative has also shifted to delayed approval, possibly due to rising bond yields and tighter liquidity conditions.

Hot Take:

The high percentage of Bitcoin held by short-term holders in unrealized losses is concerning for the market. This indicates potential selling pressure and a fragile market setup. The delay in spot-ETF approval and the impact of external factors, such as rising bond yields, are contributing to the current market conditions. It remains to be seen how the market will recover from this situation and how short-term holders will navigate their positions.