The bloodbath that brought BTC down from $21,000 to below $18,000 during the weekend has resulted in the largest USD-denominated realized loss for bitcoin investors. Interestingly, long-term holders were among the most active sellers, some of which realized losses in excess of 70%.
Largest streak of USD-denominated realized losses
After recording the longest negative streak in terms of weekly candles in the red a few weeks ago, BTC’s ongoing bear run has another negative record — this time for investors taking losses.
According to data from Glassnode, BTC holders “locked” over $7.3 billion in losses from Friday to Sunday, which is now the “largest USD denominated realized loss in bitcoin history.” This came amid the asset’s plunge from $21,000 to an 18-month low of $17,500 in the same timeframe.
The analytics company informed that around 555,000 BTC changed hands between $18,000 and $23,000. As expected, short-term holders sold off substantial amounts, with STH-SOPR “reaching levels on par with the November 2018 bear market capitulation.”
In fact, such investors realized more losses on only three occasions in the past five years – at the start of the 2018 bear market, the COVID-19-induced crash in March 2020, and from May to July 2021.
Perhaps more surprising about the weekend sell-off is the behavior of long-term holders. Glassnode said these investors had 178,000 BTC at prices below $23,000, some of which saw massive losses of over 70%. Their aggregate balance has fallen to September 2021 levels since they sold around 1.31% of their total holdings.
But the (Possibly) Good News?
With bitcoin dumping all the way down below $18,000, Glassnode noted that the percentage of the asset’s supply in profit had declined to 49%. Historically, bear markets have bottomed with this percentage dropping to somewhere between 40% and 50%, which could indicate that the bottom could be in for the current correction.
The analysis resource highlighted the importance of these levels now and added, “Bitcoin investor conviction is being seriously tested” now.
It’s worth noting that BTC has already shown some positive signs, recovering over $3,000 in a day as it currently hovers over $20,000.
