Bitcoin Investors Feel the Heat as Nearly 90% of Short-Term Holders Face Losses Amid Sell-off
Bitcoin Short-Term Holders Are Suffering Losses
Recent on-chain data reveals that Bitcoin (BTC) investors who seek short-term gains and are sensitive to rapid market movements are currently facing significant losses following a sharp price drop.
BTC, the largest cryptocurrency, had a notable drop of over 10% last week, falling to $25,600. This was the company’s worst weekly result since the FTX crisis in November.
According to data tracked by Glassnode, approximately 88.3% of the BTC supply held by short-term holders, defined as entities not retaining coins for more than 155 days, now finds itself in an unprofitable position with unrealized losses.
Approximately 2.26 million BTC out of the 2.56 million BTC held by short-term investors are represented by this. After large market peaks like those seen in May 2021 and December 2021, these losses have become particularly evident.
More coins kept for a short period of time are going to exchanges as a result of this trend, which suggests that loss dominance is increasing. Such activity frequently comes before liquidation or the use of assets as margin in derivatives trading. The large loss dominance reading is highlighted in Glassnode’s weekly report, emphasizing how underwater short-term holders are and how sensitive to price they are.
The optimism surrounding potential U.S. approval of spot Bitcoin exchange-traded funds (ETFs) has also waned after delays, and partly due to rising bond yields and tightening liquidity conditions.
