Key facts:
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Unlike the average BTC investor, short-term investors are in the red.
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According to Glassnode, the market is in a period of stress.
Bitcoin‘s (BTC) fall to $55,000 (USD), its lowest level since Black Monday a month ago, exposes a weakness that complicates the continued upward trend in price.
Glassnode, a bitcoin market data and analytics provider, warns that There is short-term stress among asset investorsThis is because some of them are in unrealized losses due to the price decline in recent months. The currency is trading 23% below the record it reached six months ago.
While the average Bitcoin investor remains profitable overall, this is not the case for those who have entered the market recently. This can be seen in the following chart, which shows the increase in unrealized losses for this group, i.e., those they are holding without selling.
Unrealized losses of short-term bitcoin investors. Source: Glassnode.
“Short-term holders continue to carry high unrealized losses, indicating that they are the primary at-risk cohort and the expected source of selling pressure in the event of a crash,” Glassnode warns. The reason for this is that they may be motivated by the stress to dump their holdings out of impatience and fear of further declines.
Currently, the cost basis for short-term investors, classified as such for storing bitcoin for less than 155 days, is USD 62,400. Until the price of the currency recovers that level, the analyst firm believes that There is an expectation of further market weakness.
Bitcoin price volatility could increase, says Glassnode
For the analyst firm, the possibility of greater selling pressure alludes to a potential for greater volatility in the near futureHowever, for the moment, the market is showing patience, with low profit and loss taking. Although it should be noted that the latter have increased slightly, as shown in the chart.
Bitcoin investors’ short-term realised losses. Source: Glassnode.
“The gradual upward trend indicates that fear is creeping into investors’ behavioral patterns,” Glassnode believes about loss-taking. This differs, it clarifies, from the average investor who, while maintaining profitability, shows solidity in his positioning.
According to market players such as the Coinbase exchange, Bitcoin’s current weakness is due to the lack of substantial bullish narratives. Awarded This is partly due to the northern hemisphere summer, a season in which markets tend to fall, as CriptoNoticias reported.
In tune with various projectionsthe exchange expects the beginning of autumn this month and the expected reduction of interest rates in the United States will create a better environment for bitcoin by the end of 2024.
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