The largest bitcoin investors’ realized loss in history just happened, according to Glassnode, an analytics firm. However, there’s potential for good news – just around the corner. Over the weekend, investors realized upwards of $7 billion in losses.
This bloodbath brought BTC from $21,000 to under $18,000 over the weekend. Unfortunately for some, this resulted in the largest realized loss for USD-based BTC investors. An interesting note is that some long-term holders were the most active sellers, some of whom sustained losses in excess of 70% of their investments.
This USD-Denomatinated Loss Streak the Largest in History?
After registering the longest negative streak in weekly candles a few weeks ago, the ongoing bearish run of BTC hit another unfortunate record. This time, the record goes to the investors realizing losses.
Per data provided by Glassnode, BTC holders “locked” in upwards of $7.3 billion in losses over the period of Friday, June 17 to Sunday, June 19. Now, this period is the “largest USD-denominated realized loss in bitcoin history.”
This happened amid BTC’s plunge from $21,000 to $17,500, an 18-month low for the digital asset.
The last three consecutive days have been the largest USD denominated Realized Loss in #Bitcoin history.— glassnode (@glassnode) June 19, 2022
Over $7.325B in $BTC losses have been locked in by investors spending coins that were accumulated at higher prices.
A thread exploring this in more detail 🧵
According to the firm, roughly 555,000 bitcoin changed hands between $18,000 – 23,000. As you might expect, short-term holders sold their assets in substantial quantities. This led to STH-SOPR “reaching levels equivalent to the Nov 2018 bear market capitulation event.”
These investors realized more losses in 3 instances over the past five years. First, there was the bear market at the beginning of 2018. Next, there was the pandemic-induced crash in the spring of 2020 followed by the run from May to July 2021.
Still, the behavior displayed by long-term investors is quite possibly more surprising. According to Glassnode, long-term holders dropped roughly 178,000 bitcoin at prices below $23,000. Some of these investors caught massive losses of over 70% or more.
The aggregate balance among these holders dropped to levels that rival September 2021, when they sold off roughly 1.31% of their assets.
#Bitcoin Long-Term Holders contributed to the sell-side, liquidating around 178k $BTC at prices below $23k.— glassnode (@glassnode) June 19, 2022
This represents around 1.31% of their total holdings, and returns aggregate LTH balance to Sept 2021 levels.
Is There Good News in All of This?
Among the largest bitcoin investors’ realized loss, it may not seem there’s much silver lining. However, the analytics firm noted that the percentage of BTC’s supply in profit declined to 49%. If we take a historical perspective, bear markets tend to bottom when this percentage lands between 40% and 50%.
What does that mean for HODLers? This could mean that we’re at the bottom of the current correction. Glassnode outlined how important these levels are now, stating the following.
“Bitcoin investor conviction is seriously being put to the test.”
Additionally, it’s important to note that there are some positive signs for BTC, already recovering $3,000 in a day – currently hovering over $20,000.