Bitcoin Short-Term Holders Face Challenges
A recent report by Glassnode, an analytics firm, has shed light on the difficulties faced by short-term holders (STHs) of Bitcoin. STHs are defined as entities holding Bitcoin for 155 days or less, and according to Glassnode’s research, approximately 97.5% of these investors are dealing with unrealized losses. As of September 17, the cost basis for those who have not sold their BTC is around $28,000, just 5% above the current market rate. This has caused many STHs to reconsider their investment strategies.
Change in Sentiment and Trend Confidence Metric
Glassnode’s “The Week On-Chain” report also highlights a shift in sentiment among Bitcoin’s short-term holders. The report distinguishes between STHs who spend their Bitcoin and those who hold it. Interestingly, during the market decline from $29,000 to $26,000 in mid-August, the cost basis of spenders was lower than that of holders. This suggests a sense of concern and pessimism among the STH community.
Glassnode has introduced a “trend confidence metric” to quantify this sentiment further. It calculates this metric by subtracting the spender’s cost from the holder’s cost basis and dividing the result by Bitcoin’s current price.
Hot Take: Bitcoin Short-Term Holders Grappling with Unrealized Losses
The recent findings from Glassnode reveal that short-term holders of Bitcoin are facing challenges due to unrealized losses. Nearly all of these investors are experiencing losses, with their cost basis hovering just above the current market rate. This has led to a shift in sentiment among short-term holders, indicating concern and pessimism about the cryptocurrency’s future. Glassnode’s trend confidence metric further quantifies this sentiment, highlighting the impact of market fluctuations on Bitcoin investors. It remains to be seen how these challenges will shape the strategies and decisions of short-term holders in the crypto ecosystem.
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