Glassnode is an analytics company that specializes in on-chain data. In a recent report, they revealed how Bitcoin has not yet seen this confirmation of a historical bear market in the current cycles.
Bitcoin Unrealized Loss Hasn’t Spiked For Long-Term Holders Yet
This week’s report is the latest in a series of weekly reports. Glassnode Has discussed the trends in Unrealized loss for the two main Bitcoin cohorts. The “Unrealized Loss”The ‘;’ is an indicator on the chain that shows the amount of losses that BTC addresses are accumulating.
It works by going back through each coin’s transfer history to find out what the price was at its last move. If this previous trading price is more than the current spot price for any token, then that particular token’s assumed to be holding a net loss.
It uses the price difference to determine the exact amount of loss. This value is then added up for all the coins in circulation to arrive at the total.
In the context of the current topic, the usual version of the Unrealized Loss isn’t the one of interest, but rather a new variant known as the Unrealized Loss per Percent Drawdown. According to the analysts,
As the market continues to contract, it’s reasonable to expect the absolute size of unrealized losses to grow. In order to account for it and standardize the drawdowns at different magnitudes we have introduced a new version of this metric. Calculate the Unrealized loss per percent of DrawdownThis is a measure of the decline in percentage terms from the peak.
Here is the first chart which shows the Bitcoin trend for short-term investors:
“Short-term holders”STHs are Bitcoin holders who bought their coins in the last 155 days. BTC currently trades below the level it reached during this time period, meaning that these investors are in a major loss.
Recent increases in Unrealized Lost per Percentage Drawdown show this trend. The indicator has already reached a level that is comparable to values at the beginning of past bear markets.
While the STHs are in substantial losses, the same isn’t true for the other side of the market: the “long-term holders” (LTHs).
Investors who held onto their coin since more than 15 weeks ago now have zero unrealized losses. LTHs’ losses have tended to spike during a transition from a bull market.
According to the report,
The confirmation of a bear market is often accompanied by a substantial increase in the unrealized loss amongst long-term owners, even if the event occurs after the market’s peak.
So far, this signal hasn’t appeared for Bitcoin. But, you should keep in mind the fact that soon, the best buyers will be promoted to the LTHs. When that occurs, it is likely to lead to an increase in the number of losses amongst this group.
BTC price
Bitcoin’s price is now moving sideways around $85,000, causing a break in its recovery rally.
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Source: www.newsbtc.com
