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The bitcoin market has not yet reached levels of complete capitulation, however, short-term investors are exiting losing positions and increasing bearish pressure on the cryptocurrency
The bitcoin market is far from complete capitulation. This is the conclusion made by Glassnode analysts. According to them, the average daily losses of short-term sellers do not exceed 0.5% of market capitalization per day. While losses of this magnitude are significant, they are far from the extreme levels seen in the 2018 bear market, March 2020, or May 2021.
Profits and losses of short-term holders, 30-day average. Source: glassnode
Meanwhile, experts note that the market has not yet exhausted its downside potential. The average realized value of a bitcoin for coins moving in the last 155 days is $46,400. This means that about 15% of short-term holders are in the red in their positions. If they start taking losses and exiting the market, the decline will continue.
Moreover, on-chain analysis shows that less than half of all transactions (47.5%) bring profit, respectively, 52.5% of all transactions are unprofitable. For comparison: during previous bearish cycles, during the capitulation of the market, the volume of losing transactions reached 55%.
Share of unprofitable profitable transactions, average value for 90 days. Source Glassnode
This on-chain statistic confirms that selling in the market is driven by short-term holders exiting losing positions. It is too early to talk about complete surrender. However, we can talk about breaking the bottom only after BTC/USD passes the $46,400 mark. Thus, short-term holders will break even and reduce bearish pressure on the market.
At the time of writing, BTC/USD is trading at $41,100. During the day, the first cryptocurrency has risen in price by more than 8%, while the weekly ratio remains negative (-5% against the rate of 7 days ago).
You can read the latest Bitcoin (BTC) technical analysis here.
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