Bitcoin is off nearly 55% from its November peak, and 40% of holders are now underwater on their investments, according to Glassnode.
The price of Bitcoin ($BTC) recently plunged to $31,000 after a series of withdrawals on the Anchor Protocol led to the largest decentralized stablecoin, UST, losing its peg. Bitcoin’s crash has seen 40% of investors in the cryptocurrency sit on unrealized losses. unprecedented
That percentage is even higher when you separate for the short-term holders.
In the last month alone, 15.5% of all bitcoin wallets fell into an underlying loss, as the world’s most popular cryptocurrency plunged to the $31,000 level, pursuing tech stocks lower. Bitcoin’s close correlation to the Nasdaq contests the argument that the cryptocurrency functions as an inflation hedge.
Analysts from Glassnode also distinguished an influx of “urgent transactions” amid this latest sell-off, in which investors paid higher fees, demonstrating they were willing to pay a premium to accelerate transaction times. The total value of all on-chain transaction fees paid reached 3.07 bitcoin over the last week — the largest yet recorded in its dataset.
The report continued, “The dominance of on-chain transaction fees associated with exchange deposits also signaled urgency,” further supporting the case that bitcoin investors were seeking to de-risk, sell, or add collateral to their margin positions in reply to recent market volatility.
Throughout the sell-off, this past week, more than $3.15 billion in value moved into or out of exchanges, the largest amount since the market hit its all-time high in November 2021.
According to the report, most wallet associates, “from shrimp to whales,” have softened in their on-chain accumulation trends, referring to small-scale and large-scale investors.
Wallets with more than 10,000 bitcoin balances have been a significant distributive force over the last few weeks.
And while there is more conviction among retail investors — data shows that those holding less than 1 bitcoin are the strongest accumulators — the accumulation among these smaller-scale holders is remarkably weaker than it was in February and March.
Fundstrat Global Advisors is calling a bottom of around $29,000 a coin, and the firm is now requesting clients to buy one to three months of protection on long positions.
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