- 88.3% of BTC’s short-term holder supply was being held at an unrealized loss following last week’s decline in value.
- BTC’s price is at risk of further decline should short-term holders intensify coin distribution.
Last week’s deleveraging event in the Bitcoin’s [BTC] futures markets caused the king coin to record its most significant single-day sell-off of the year. As investors count their losses, short-term holders may face a gloomy future as 88.3% of short-term holder supply was being held in an unrealized loss, Glassnode found in a new report.
Read Bitcoin’s [BTC] Price Prediction 2023-2024
Short-term holders were the most exposed
According to the on-chain data provider, a large percentage of BTC’s supply previously held in profit fell sharply last week. This suggested that a sizeable number of investors that bought the leading cryptocurrency at high prices were plunged into losses.
Glassnode opined that this was due to a “top heavy market.” This refers to a market situation where many investors buy BTC at a price that is close to or above the current price. This means these investors would be in an unrealized loss position if the coin’s value fell.
Noting that this behavior was common among BTC’s short-term holders, Glassnode found that:
“Sharp upticks in STH Supply in Loss tend to follow ‘top heavy markets’ such as May 2021, Dec 2021, and again this week.”
“Out of the 2.56M BTC held by STHs, only 300k BTC (11.7%) is still in profit,” Glassnode added.
Author: Abiodun Oladokun
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