Bitcoin short-term holders have recently experienced the largest loss-taking event of the current cycle, according to on-chain data analyzed by Glassnode. The analytics firm’s latest weekly report highlights the changing situation of Bitcoin short-term holders following a market downturn.
Short-term holders, defined as BTC investors who have purchased their coins within the past 155 days, are typically new entrants into the market who may not have a strong resolve. This group often participates in panic sell-offs when faced with market volatility, as seen in the recent price decline.
Glassnode shared a chart showing the Relative Unrealized Loss of short-term holders, which measures the total amount of loss these investors are holding onto normalized according to market cap. The graph indicates a significant increase in Bitcoin short-term holder unrealized losses, reaching levels historically seen in bull markets.
Despite the elevated paper losses, Glassnode notes that the financial damage suffered by new investors remains in line with a previous market event. When investors decide to sell their underwater tokens, the losses become realized. The 30-day sum of Bitcoin short-term holder realized losses recently hit $7 billion, the highest value in the current cycle.
While these losses are substantial, they pale in comparison to previous capitulation events. For example, the realized losses following the May 2021 selloff reached $19.8 billion, and during the 2022 bear market, they peaked at $20.7 billion. The current capitulation event, while significant, is not as large in scale.
At the time of writing, Bitcoin is trading around $85,000, up almost 4% in the last 24 hours. The data suggests that short-term holders have been heavily impacted by the recent market downturn, with significant losses realized. Investors will be closely monitoring the market to see how these holders react in the coming days.