Short-Term Bitcoin Holders Face Historic Losses

During the recent market dip, the price of Bitcoin witnessed one of its worst corrections after the digital asset reached a drawdown of 54%, even worst than the bear market of 2017. As a result, short-term Bitcoin holders are facing the heat.

Glassnode’s data indicates a sharp rise in the losses of short-term holders of BTC. According to the company, the profitability of Bitcoin owners has deteriorated to record low levels. “BTC’s Relative Unrealized Profit (7d MA) just reached a 15-month low of 0.491,” Glassnode noted.

Several key indicators of the Bitcoin network are painting the same picture. The net BTC exchange inflow reached the highest level in 4 weeks on Wednesday, highlighting that the Bitcoin holders are transferring their digital assets to crypto exchanges for selling.

“Short-Term Holders are currently holding historically large unrealized losses. The STH-NUPL metric tracks aggregate unrealized loss held by the STH cohort, in proportion to the market cap. A value of -40% is coincident with some of the deepest selloffs in history. With BTC trading down over 50% from ATHs, investor profitability has deteriorated, and heavy losses are being realized on-chain,” Glassnode highlighted.

Crypto Holders

The latest trend from long-term BTC holders shows a completely different picture. While short-term holders of the most dominant digital asset are selling under pressure, long-term owners are actually buying the BTC dip.

“Interestingly, STH supply remains near multi-year lows, which is indicative of their counterpart, the Long-Term Holders (LTHs), who appear impressively unfazed by such a severe drawdown. The proportion of LTH supply has actually returned to a modest uptrend, which indicates a general unwillingness for this cohort to liquidate. Faced with what looks like a bear market, LTH coins are firmly in cold storage, which remains a constructive undertone,” the company added in its report.