On-chain data shows that Bitcoin investors who bought at the top are giving up after BTC pulled back below the $93,000 level.
Short-term holders of Bitcoin sold large amounts at a loss
like Analyst at CryptoQuant Quicktake Another explainedThe recent collapse of Bitcoin sparked panic among short-term holders. “Short Term Holders” (STHs) are Bitcoin investors who have purchased their tokens within the past 155 days.
STHs include investors and traders who are new to the sector and, as such, the group is generally considered to represent the weak side of the market. Group members who go beyond the 155-day period without making a single transaction get upgraded to “Long Term Holders” (LTHs).
As is usually the case, STHs have been panic selling again after the recent price decline. There is nothing special about this, but what is noticeable is which part of the STHs specifically is involved in the selling.
The indicator shared by Quantitative is “STH Exchange Profit Loss,” which tells us whether members of this group are transferring their coins to exchanges at a profit or a loss.
The reason this metric specifically tracks transactions on exchanges is of course because investors typically use these centralized platforms for selling-related activities.
Now, here’s the graph of STH’s earnings loss on the exchanges over the past few days:
The value of the metric seems to have registered a red spike recently | Source: CryptoQuant
The above chart shows that Bitcoin STH profit loss on exchanges saw a sharp negative rise alongside the cryptocurrency falling below $93,000.
This indicates that these investors experienced a lot of losses. Since current prices are still higher than the entire history of the asset, the only owners who can sell at a loss are large buyers.
Therefore, a red spike in the indicator means that some of these late entrants have already decided to give up on the asset. Capitulation events have historically led to bottoms for BTC, as capital is rotated out of weak hands during those events.
However, it remains to be seen whether the recent STH loss event is large enough to bottom out for Bitcoin price or not.
In other news, diamond hands in the market were also involved in a significant sell-off recently, as data from the on-chain analytics firm showed Vitreous node It has been revealed.
The trend in the netflow for the BTC LTHs | Source: Glassnode on X
Unlike Bitcoin STHs, the patience of these investors has rewarded them with large profits, so selling them is different.
Bitcoin price
Bitcoin fell below the $92,000 level earlier in the day, but the coin appears to have seen a slight recovery to $92,600, at least for now.
Looks like the price of the coin has plunged over the past day | Source: BTCUSDT on TradingView
Featured image from Dall-E, Glassnode.com, CryptoQuant.com, Chart from TradingView.com