Bitcoin Investors Are Feeling The Heat As Nearly 90% Of Short-term Holders Suffer Losses During The Sell-off

According to recent on-chain statistics, Bitcoin (BTC) investors seeking short-term returns and who are sensitive to rapid market swings are currently suffering huge losses as a result of a steep price decline.

BTC, the largest cryptocurrency, fell by more than 10% last week, plummeting to $25,600. This was the company’s worst weekly result since the November FTX debacle.

According to Glassnode data, about 88.3% of the BTC supply is held by short-term holders, defined as entities that do not keep coins for more than 155 days, and is now in an unproductive position with unrealized losses.

This represents around 2.26 million BTC out of the 2.56 million BTC held by short-term investors. These losses have been more visible following major market peaks such as those experienced in May 2021 and December 2021.

As a result of this tendency, more coins kept for a short amount of time are being exchanged, indicating that loss domination is increasing. This type of activity is typically preceded by liquidation or the use of assets as margin in futures trading. Glassnode’s weekly report emphasizes the huge loss dominance reading, underlining how submerged short-term holders are and how price sensitive they are.

The euphoria surrounding the anticipated approval of spot Bitcoin exchange-traded funds (ETFs) in the United States has also diminished, owing in part to rising bond yields and tightening liquidity circumstances.