Short-term holder supply remains at multi-year lows after the latest blow to the Bitcoin price.
The violent sell-off last week spurred by the deleveraging event has taken a serious toll on short-term Bitcoin holders making for the largest single-day down move YTD. This subsequently pushed prices below the ‘Short-Term Holder’ cost basis. Recent data suggest that a significant portion of the short-term holder supply is currently being held at an unrealized loss.
According to Glassnode, the short-term holder cost basis is an on-chain price model which has historically offered support during robust uptrends. Its latest analysis revealed that the Realized Price and the Long-Term Holder cost basis, both trading noticeably below, places the market in a somewhat “precarious” from a psychological standpoint.Bitcoin fell close to $26k as turmoil gripped the market and was still down by over 10%.
Short-term holders are essentially entities that do not hold coins for more than 155 days and are the most reactive group of traders to market volatility. As a result, over 88.3% of the supply controlled by short-term holders is currently underwater. Glassnodethat out of the 2.56 million BTC held by this cohort, only 300k, representing only 11.7%, is still in profit.
There has been a consistent decline in profit dominance as the 2023 rally progressed. It was also found that more short-term holders acquired coins with an increasingly elevated cost basis.“This week we saw the largest loss dominance reading since the March sell-off to $19.8k. This suggests that the STH cohort are both largely underwater on their holdings, and increasingly price sensitive.
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