That Bitcoin Thursday through Saturday sell-off was the biggest realized loss of all time for the top cryptocurrency by market cap, with investors recording $7.3 billion in locked-in losses.
About 555,000 bitcoin traded in the $18,000-$23,000 range over three days, with many sellers originally buying BTC at much higher prices, according to research firm Glassnode.
Short-term holders achieved a Profit ratio of output spent matches that of the 2018 bear market, meaning their gains have fallen overall, while some long-term holders experienced “deep capitulation” after buying at Bitcoin’s all-time high of nearly $69,000 and selling for closer to $18,000 apiece glass node.
“Almost all wallet cohorts, from shrimp to whales, are now showing massive unrealized losses, worse than in March 2020. The least profitable wallet cohort holds 1-100 BTC,” Glassnode reported.
GlobalBlock cryptocurrency analyst Marcus Sotiriou said Bitcoin could be on the verge of a temporary bottom as the cryptocurrency has historically bottomed when its supply percentage of profit (PSP) is reached 40% to 50%.
“It’s important to note when looking at this historical data that Bitcoin has not experienced a period of sustained inflation,” Sotiriou said in a statement Monday. “We may be nearing a generational low as more forced liquidations occur, but we cannot be confident of a sustained uptrend until inflation convincingly slows.”
Yuya Hasegawa, an analyst at Japanese cryptocurrency exchange Bitbank, also sees more potential downsides as Bitcoin’s PSP is just over 50%.
“Bitcoin’s weekend decline wasn’t deep enough, to put it simply,” Hasegawa wrote in a report Monday. “Bitcoin still has downside potential, but if its PSP drops below 50% then the price could finally out below.”
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