Glassnode: Unrealized Losses Climb for Short-Term Bitcoin (BTC) Investors

A recent report from Glassnode, led by researchers Ukuriaoc and Cryptovizart, highlights growing stress among short-term bitcoin (BTC) holders.

Recent Glassnode data, helmed by researchers Ukuriaoc and Cryptovizart, reveals growing stress among short-term bitcoin (BTC) holders. As market pressure mounts, these investors face increasing unrealized losses, which could drive future sell-side activity.

Glassnode’s onchain analysis shows that short-term bitcoin (BTC) holders are currently bearing the brunt of unrealized losses in the BTC market. While overall market losses remain historically low, this specific cohort is facing significant financial strain. As downward pressure has increased over the past three months, unrealized losses for short-term holders have consistently risen. Glassnode’s report states:

“However, even for this cohort, the magnitude of their Unrealized Losses relative to the market cap is not yet in full-scale bear market territory and more closely resembles the choppy 2019 period.”

The broader market, however, continues to show resilience, with unrealized profits still six times greater than losses across the investor landscape, according to Glassnode’s report. Notably, short-term holders, especially those who purchased in the past six months, are particularly vulnerable.

The average cost basis for these investors ranges between $59,000 and $65,000, which is well above the current spot price of bitcoin. This trend suggests that until the spot price climbs above their breakeven point, these investors are expected to remain under pressure.

“Generally speaking, until the spot price reclaims the STH cost basis of $62.4k, there is an expectation for further market weakness,” Glassnode’s onchain analysis concludes.

Despite these challenges, realized profit and loss-taking activities remain minimal, according to Glassnode’s analysis. The Sell-Side Risk Ratio, a key indicator of market behavior, suggests that most coins being transacted are near their original acquisition prices. This metric typically precedes heightened volatility, indicating potential turbulence in the near future as the market searches for equilibrium. Short-term holders are likely to be the primary source of sell-side pressure if market conditions worsen, the report adds.

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