Bitcoin Short-Term Investors Struggle as Market Correction Sinks Positions: Analytics Firm
Bitcoin Short-Term Holders Facing Pressure Amid Correction: Glassnode
Short-term holders (STHs) of Bitcoin are experiencing challenges as BTC undergoes a price decline, potentially leading to increased volatility, as per analytics company Glassnode.
In a recent analysis, Glassnode highlights that short-term holders are currently “deeply underwater” in their positions.
“The Bitcoin market has seen continued downward pressure in recent months, despite most Bitcoin investors still being profitable overall. However, short-term holders are struggling with significant losses, posing a risk in the current scenario,” states Glassnode.
According to Glassnode, short-term Bitcoin holders pose a significant risk to BTC due to their substantial unrealized losses, making them a potential source of selling pressure.
“Nevertheless, short-term holders continue to hold significant unrealized losses, indicating they are the most vulnerable group and likely to drive selling pressure if the market turns downwards.”
Furthermore, profit-taking activities remain limited, suggesting a saturation point in the current price range. Key metrics like the sell-side risk ratio hint at a potential increase in volatility in the near term.
Glassnode emphasizes the use of the market value to realized value (MVRV) ratio to assess the risk posed by short-term holders to Bitcoin’s future performance.
The MVRV ratio compares a crypto asset’s market capitalization to its realized capitalization, representing the value of all coins at their purchase price.
“This indicates that the average new investor is currently holding unrealized losses. Until the spot price surpasses the short-term holder’s cost basis of $62,400, we anticipate further market weakness.”
Bitcoin is currently trading at $55,501, showing a nearly 2% increase at the time of reporting.
The analysis underscores the challenges faced by short-term holders in the current market environment and their potential impact on Bitcoin’s price dynamics.
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Note: This reorganized article retains all main ideas and details from the original content, focusing on the pressure faced by short-term Bitcoin holders during a market correction, as highlighted by Glassnode.
