Bitcoin speculators are underwater on 88% of their BTC bags — Research

Bitcoin (BTC) holdings owned by speculators are almost 90% in the red after the “flash crash” to $26,000, new research says.In the latest edition of its weekly newsletter, “The Week On-Chain,” analytics firm Glassnode exposes the true expense of last weeks BTC cost dip to newcomers.Short-term holders “increasingly delicate” to BTC priceWhile only totalling around 10%, the drop on BTC/USD seen toward the end of last week upended market sentiment.As BTC rate forecasts focus on $25,000 and even lower, the dust is settling on a trading environment accustomed to months of sideways behavior.Arguably nowhere is this more visible than amongst short-term holders (STHs)– the more speculative end of the hodler spectrum.Glassnode defines an STH as an entity holding onto BTC for 155 days or less.”Out of the 2.56 M BTC held by STHs, just 300k BTC (11.7%) is still in earnings,” the research study states.Bitcoin STH supply profit and loss chart (screenshot). That stated, the past week has dramatically reshaped profitability among the friend, which formerly operated as a structure for the BTC trading range.The STH aggregate breakeven point, understood as realized rate, currently sits above $28,500.

Bitcoin (BTC) holdings owned by speculators are almost 90% in the red after the “flash crash” to $26,000, new research study says.In the latest edition of its weekly newsletter, “The Week On-Chain,” analytics firm Glassnode reveals the true expense of last weeks BTC cost dip to newcomers.Short-term holders “progressively sensitive” to BTC priceWhile just totalling around 10%, the drop on BTC/USD seen toward the end of last week overthrew market sentiment.As BTC cost forecasts focus on $25,000 and even lower, the dust is settling on a trading environment accustomed to months of sideways behavior.Arguably no place is this more noticeable than amongst short-term holders (STHs)– the more speculative end of the hodler spectrum.Glassnode defines an STH as an entity holding onto BTC for 155 days or less.”Out of the 2.56 M BTC held by STHs, just 300k BTC (11.7%) is still in profit,” the research study states.Bitcoin STH supply profit and loss chart (screenshot). That stated, the previous week has actually significantly reshaped profitability amongst the friend, which previously operated as a framework for the BTC trading range.The STH aggregate breakeven point, understood as understood cost, currently sits above $28,500.

Other Questions People Ask

What does it mean that Bitcoin speculators are underwater on 88% of their BTC bags?

This indicates that a significant majority of Bitcoin holdings by speculators are currently at a loss, particularly after the recent price drop to $26,000. According to research from Glassnode, only about 11.7% of the BTC held by short-term holders is still profitable. This situation highlights the challenges faced by those who entered the market during the recent price surge, as many are now grappling with substantial losses.

How has the recent BTC price dip affected short-term holders?

The recent flash crash has left short-term holders (STHs) particularly vulnerable, with 88% of their BTC holdings now in the red. Glassnode's research reveals that out of 2.56 million BTC held by STHs, only 300,000 BTC remains profitable. This drastic shift in profitability has reshaped market sentiment and could influence future trading strategies among these speculators.

What is the breakeven point for Bitcoin short-term holders after the recent crash?

The aggregate breakeven point for short-term holders currently sits above $28,500, according to Glassnode's findings. This means that for STHs to recover their investments, Bitcoin's price must rise significantly from its current levels. As market forecasts suggest potential declines to $25,000 or lower, this breakeven point poses a challenge for many speculators looking to exit their positions without incurring losses.

Why are Bitcoin speculators increasingly sensitive to price changes?

Bitcoin speculators are becoming more sensitive to price changes due to the high percentage of their holdings now underwater. With only a small fraction of their investments still in profit, any further decline in BTC's value could exacerbate their losses. This heightened sensitivity can lead to increased volatility in trading behavior as these speculators react to market fluctuations.

What implications does the research on Bitcoin speculators have for new investors?

The research indicates that new investors entering the Bitcoin market should be cautious, especially given that a large portion of existing speculators are facing losses. Understanding that 88% of BTC held by speculators is underwater can help newcomers gauge market sentiment and make informed decisions. It may also be wise for new investors to consider longer-term strategies rather than attempting to time short-term price movements.