Blockchain analysis company Glassnode released a report stating that although the collapse of the crypto market can be partly attributed to panic selling, most long-term holders did not sell.
The latest data shows that 73.17% of all Bitcoin “entities” are still profitable. This is because the selling is mainly caused by panic selling by new investors, not by long-term holders. The loss-making investors are mainly buyers in the past 3-4 months.
In other words, although Bitcoin’s current trading price is far below the historical high, most investors have already bought it before the current level of $37,000. During the sell-off, the number of giant whales (wallets holding 10,000 or more bitcoins, $382 million in cryptocurrency) also increased from 85 to 90, which means that giant whales see this time as snapping up more bitcoins Opportunity.
The Bitcoin market recently experienced its largest deleveraging since the March 2020 sell-off. The market fell from a weekly high of $59,463 to a low of $31,327, a drop of more than 47%.
As Nathaniel Whittemore concluded, Bitcoin price movements are largely driven by FUD. The sell-off is so severe that it raises a question in many people’s minds as to whether the bull market in 2021 is still in play.
The scale of losses on the chain this week exceeded the losses caused by all previous sell-offs, including the sell-offs in March 2020, November 2018, and January to February 2018. It is undeniable that last week was a difficult week for Bitcoin. From Elon Musk’s tweets to China’s regulatory news, a series of factors contributed to the collapse of the cryptocurrency with the largest market value. Last week, its price fell to US$30,000 each, 52% lower than the all-time high set in April.
All in all, the data seems to indicate that those who are eliminated from the market are mainly those who are new to crypto investment.
Glassnode wrote: “There is no doubt that a large part of the recent sell-off has been driven by short-term holders, that is, those who have bought Bitcoin in the past 6 months.”
Bio: Jamie Kim is a technology journalist. Raised in Hong Kong and always vocal at heart. She aims to share her expertise with the readers at blockreview.net. Kim is a Bitcoin maximalist who believes with unwavering conviction that Bitcoin is the only cryptocurrency – in fact, currency – worth caring about.