Over 80% of Short-Term Bitcoin Holders Underwater — What This Means For BTC
20 August 2024 - 12:30PM
NEWSBTC
Bitcoin (BTC) is currently in red regarding price performance,
dragging the rest of the crypto market along with it. Amid the
continuous bearish price action, the latest data has revealed that
Bitcoin short-term holders now face losses compared to their
initial purchase prices. Onchain data expert James Check
highlighted this in a recent post on X, disclosing that over 80% of
Bitcoin’s short-term holders, those holding their BTC for less than
155 days, have bought their tokens at prices higher than the
current market rate. Underwater Investors, Implication For Bitcoin
This situation of the majority of short-term holders being in the
red (at a loss), as pointed out by Check, is quite similar to the
scenario that took place in “2018, 2019, and mid-2021, which
signaled many investors were at risk of panicking and precipitating
a bearish trend.” Right now, over 80% of #Bitcoin Short-Term
Holders are underwater, meaning their coin was acquired at a price
above the current spot price. This is similar to 2018, 2019, and
mid-2021 which signalled many investors were at risk of panicking,
and precipitating a bearish trend. pic.twitter.com/8jM7PBqh5z —
_Checkmate 🟠🔑⚡☢️🛢️ (@_Checkmatey_) August 19, 2024 Despite the
bleak outlook suggested by the high percentage of underwater
short-term holders, the implications for the market are nuanced.
Related Reading: Bitcoin Sees Momentum In Hashrate Despite Failure
To Beat $60,000 Resistance Check highlighted that the psychological
impact on holders varies greatly depending on the extent of their
losses. He elaborates that a minor unrealized loss, such as 1%, has
a significantly different psychological effect on an investor than
a more substantial loss of 20%. Despite the high percentage of
holders facing losses, the total unrealized loss across the market
equates to only 4% of Bitcoin’s total market capitalization. This
indicates that while the sentiment may be bearish, the financial
impact might not be as severe as expected. BTC Market Performance
And Outlook Bitcoin has continued to gradually plunge towards the
downsides, breaking multiple supports. Over the past week, the
asset has declined by 1.7% and further down by 2.7% in the past
day. This bearish performance has brought the asset to trade as low
as $57,918 earlier today before now, retracing slightly to trade at
$58,339 at the time of writing. Interestingly, despite the decline,
BTC’s daily trading volume has seen quite the opposite performance.
According to data from CoinGecko, this metric has increased from
below $17 billion at the start of today to roughly $22.6 billion.
Related Reading: Bitcoin Price Trims Gains: Is The Recovery Losing
Steam? Regardless, several analysts remain bullish on BTC,
anticipating a rebound soon. Renowned crypto analyst Elsa on X has
revealed that Bitcoin’s daily MACD indicator has switched bullish.
However, it appears BTC is “lacking” the liquidity needed to make
that push to the upside. $BTC daily MACD has turned bullish But
still, liquidity is lacking which is needed for a big #Bitcoin
pump! pic.twitter.com/snUqfPdFGU — Elja (@Eljaboom) August 19, 2024
Featured image created with DALL-E, Chart from TradingView
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