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Cryptocurrency News Articles
Bitcoin [BTC] Short-Term Holders Capitulate as 80% Are Now Underwater
Aug 21, 2024 at 11:00 am
Bitcoin [BTC] has faced significant challenges in maintaining its position above the $60,000 price level, frequently dipping below this key threshold in recent weeks.
Bitcoin [BTC] encountered difficulties in the last few weeks while attempting to maintain its position above the $60,000 price level, frequently dropping below this key threshold.
This volatility had a significant impact on short-term Bitcoin holders, with many of them holding their assets at a loss due to the fluctuating price.
Short Bitcoin holders at a loss
According to a recent report, over 80% of short-term Bitcoin holders were holding their BTC at a loss at press time.
This meant that their Bitcoin investments were worth less than what they initially paid.
The situation arose as Bitcoin continues to struggle around the $60,000 price level.
The analysis drew parallels between the current scenario and similar market conditions in 2018, 2019, and mid-2021.
In those periods, a large proportion of short-term holders were also held at a loss, which led to increased panic selling. This behavior contributed to prolonged bearish trends as investors rushed to cut their losses.
AMBCrypto’s analysis of the 30-day Market Value to Realized Value (MVRV) on Santiment confirmed the challenges faced by short-term Bitcoin holders.
The metric indicated that these holders have been in a loss position for several weeks. The MVRV has been below zero since the beginning of the month, reflecting that most short-term holders were underwater.
The MVRV remained below zero for an extended period, signaling that short-term holders have generally been holding at a loss.
On the 5th of August, the MVRV dropped to around -13%, highlighting the extent of the losses.
Source: Santimet
As of the 18th of August, the MVRV had improved to approximately -5%, still in negative territory but showing some recovery.
In the last 48 hours, the situation improved further, with the MVRV rising to around 1% as of this writing. This positive shift is largely due to the recent price gains, which alleviated some pressure on short-term holders.
More Bitcoin holders remain profitable overall
Shifting the focus from short-term holders to the overall Bitcoin holder base reveals a more positive outlook.
According to data from IntoTheBlock, a substantial majority of Bitcoin holders were still in profit despite recent price fluctuations.
Specifically, over 80% of all Bitcoin addresses, equivalent to approximately 45.45 million addresses, were “in the money,” meaning they held BTC at a price higher than their purchase price.
Furthermore, about 6.9 million addresses, or around 12.9% of the total, were “out of the money,” meaning these holders were at a loss, based on press time prices. 2% of the addresses were at breakeven.
While short-term holders have been more affected by the recent price declines, the overall market is still largely in profit.
This means that reactions from short-term holders, who are more likely to sell at a loss, are unlikely to have a significant impact on the broader BTC price trend.
Bitcoin price in the last 48 hours
As of this writing, Bitcoin has seen a price increase of over 2%, pushing it to approximately $60,800. This follows an almost 1% rise in the previous trading session, which brought its price to around $59,452.
The recent gains have brought Bitcoin closer to a critical resistance level marked by its short-term moving average (yellow line) around the $60,000 mark.
Source: TradingView
Read Bitcoin’s [BTC] Price Prediction 2024-25
Suppose Bitcoin can break through the $60,000 resistance provided by the short-term moving average.
In that case, the next major resistance level lies at around $63,000, marked by the long-term moving average (blue line). This level will be the next critical target for Bitcoin to reach as it continues its upward trend.
Disclaimer:info@kdj.com
The information provided is not trading advice. kdj.com does not assume any responsibility for any investments made based on the information provided in this article. Cryptocurrencies are highly volatile and it is highly recommended that you invest with caution after thorough research!
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