Short-Term Bitcoin Holders Down To Largest Unrealized Losses Since FTX Collapsed: Glassnode
By Benzinga
In the aftermath of the crypto carnage on Aug. 5, short term holders of assets are glaring at their largest unrealized loss since the collapse of Sam Bankman-Fried led FTX in November 2022, according to a report.
What Happened: The Bank of Japan’s unexpected interest rate hike led to a massive unwinding of the yen carry trade, causing ripple effects across international markets.
Bitcoin (CRYPTO: BTC), the market’s leading cryptocurrency, dropped by almost 19%, while Ethereum (CRYPTO: ETH) faced a more severe loss, falling by nearly 25%.
The current market stress has imposed serious investor stress on participants, a Glassnode report states.
The report further states that just 7% of short-term holder supply is currently held in a profitable position.
This is more than one standard deviation below the long-term average, “and suggests a notable degree of financial stress amongst recent buyers.”
The market’s reaction to the price decline has been swift and severe.
$1.38 billion in realized losses were incurred during the sell-off, with short-term holders accounting for 97% of these losses, indicating a panic-driven selling spree among newer investors.
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The report further states that as Bitcoin’s price dropped by 32% from its highest point, investors are now focusing on key price levels to see if it will recover.
The True-Market Mean ($45,900) and Active Investor Price ($51,200) are important markers.
According to Glassnode, the market found support around the Active Investor Price, indicating that long-term investors are buying at this level. However, if Bitcoin’s price falls significantly below these points, it could mean that the bullish market trend might be over.
The True-Market Mean is the average price at which active Bitcoin investors hold their coins, excluding long-dormant coins.
The Active Investor Price represents the average price paid by investors actively trading within the current market cycle.
What’s Next: Benzinga’s Future of Digital Assets event on Nov. 19 will no discuss the fallout from the FTX collapse and the steps needed to restore trust and confidence in the cryptocurrency market.
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