The decline in productivity for long-term holders reached a level last seen during the top of the bear market in 2018. Though, the market bottomed and bounced back during the preceding cycle.
Bitcoin’s (BTC) long-term profitability has declined to levels last seen during the preceding bear market in December 2018. According to data shared by crypto analytic firm Glassnode, BTC holders are selling their tokens at an average loss of 42%.
The Glassnode data designate that long-term holders of the top cryptocurrency selling their tokens have a cost basis of $32,000, meaning the average buying price for these holders selling their stack is above $30,000.
The current market downturn added to the declining productivity can be credited to several macroeconomic factors. The BTC market still has a heavy association with the stock market, especially tech stocks, which are presently seeing an even bigger downtrend than crypto.
The increasing inflation added to central banks’ failure to control it has also added to the pain of BTC investors. With much less to invest at their hands, traders and long-term holders are shifting to short-term profitability and less risky assets.
This was apparent from the BTC miner sell-offs as well, BTC miners have historically been long-term holders in expectation of a higher profit. However, the rise in energy costs, added to growing mining difficulty, has lessened the profit margins of these miners, forcing them to settle for short-term profits.
Bitcoin miner balance has seen large outflows since prices were rejected from the local high of $24.5k, signifying aggregate miner profitability is still under a degree of stress. While the miner outflow has ranged between 3k BTC – 8k BTC, however, market data specify that a price decline to $18,000 could lead to a monthly outflow of 8K BTC.
Bitcoin, the top cryptocurrency, is presently trading in the $19,000-$20,000 range, struggling to conquer the $20,000 resistance in spite of numerous breakouts above it in the month of September.
The long-term holder profitability added with miner profitability has reached a multi-year low. Though, the levels are quite similar to when the crypto market bottomed out during previous cycles.
Bitcoin is presently trading in the $19,000-$20,000 range, stressed to conquer the $20,000 resistance despite multiple breakouts above it in the month of September. The top cryptocurrency is currently trading at a 70% discount from its market top of $68,789 posted in November last year.
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