Is the Bitcoin Price in Danger? BTC Holders Facing Significant Unrealized Losses

The liquidity in the cryptocurrency market is rapidly decreasing, with both on-chain and off-chain volumes reaching record lows. This was highlighted in the latest weekly report by Glassnode on September 11. Additionally, a substantial portion of the Bitcoin (BTC) supply is on the verge of falling into significant unrealized losses.

Liquidity across the digital asset market continues to dry up, with both on-chain and off-chain volumes reaching historical lows. While HODLing remains the market preference, a significant proportion of the supply is teetering on the edge of falling into a significant unrealized loss.

– Glassnode (@glassnode) September 11, 2023

More Pain for Short-Term Bitcoin Holders

In what is being referred to as a “liquidity drought,” Glassnode notes that long-term Bitcoin holders are holding onto their assets, spending very little. This is not surprising, as long-term holders have experienced both bull and bear markets and remain unfazed by short-term price fluctuations. However, those who entered the market during the last bull run may now find themselves underwater, as Bitcoin has retreated by 63% from its peak.

Realized value settled on-chain remains extremely low, indicating minimal profit or loss being locked in by the market. Most BTC transactions are occurring near their original acquisition price. Glassnode further states that the realized profit and loss are at levels comparable to the 2020 market, indicating a total wash-out of the exuberance from the 2021 bull market.

Moreover, data shows that the supply held by long-term Bitcoin holders has reached a new all-time high of 14.74 million BTC, while the supply held by short-term holders, who are more active, has fallen to its lowest level since 2011 at 2.46 million BTC.

Regulatory concerns continue to cast a shadow over the entire cryptocurrency industry, particularly in the United States. The lack of regulatory clarity has led to a cautious approach from major players and institutions, who prefer to wait and observe before making significant moves.

Adding to market pressures, FTX may soon be granted permission to sell its crypto holdings starting September 13. This potential sell-off could further drive prices downward as the market is already experiencing a retreat. Some industry experts are expressing their concern, with Messari founder Ryan Selkis describing it as the worst sentiment he has ever seen.

We’re approaching maximum pain. Bear markets tend to last longer and have deeper dips than what we hope for. We need a couple of capitulations, followed by consolidation, and then a rebirth. This current sentiment is near the worst I’ve ever seen, even more so than 2019. The closest feeling I’ve had was back in 2015.

– Ryan Selkis 🚳 (@twobitidiot) September 11, 2023

Markets Plummet to a Six-Month Low

The total cryptocurrency market capitalization has fallen to its lowest level since mid-March, dipping as low as $1.04 trillion during early trading in Asia. The last time it fell below the psychologically significant $1 trillion level was on March 11.

Although there has been a slight recovery in the past few hours, pushing the total market cap back up to $1.06 trillion, the bears are still putting pressure on the market. Bitcoin (BTC) and Ethereum (ETH) are down 0.6% and 2% respectively, while altcoins are experiencing even more significant declines.


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Editor’s Notes

The recent downturn in the cryptocurrency market has raised concerns among Bitcoin holders, as unrealized losses become more significant. With liquidity drying up and regulatory uncertainties lingering, investors are bracing themselves for potential downside pressure on prices. However, it’s important to remember that the crypto market is known for its volatility and ability to bounce back. Stay up to date with the latest news and analysis from the cryptocurrency industry on Uber Crypto News.

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