Most of the BTC entering the market now are sold at a loss – sales are initiated by users who bought the crypto asset at the peak of the price in the spring, while now Bitcoin has fallen below $ 30,000.
During the bullish growth of BTC and reaching an all-time high above $ 60,000, new investors entered the market and contributed to the growth in trading volume. However, with the onset of the bear market, trading volume plummeted, and most of the coins currently being traded come on sale from users who bought cryptocurrency at its peak. According to a new report from Glassnode, this suggests continued dominance of bearish sentiment in the market in the short term.
“Bitcoin trading volume is now $ 5.3 billion per day, up from $ 15.5 billion at its peak in 2021. Now the trading volume is dominated by coins that are sold at a loss. ”
This situation is due to the fact that the price of BTC has now dropped by more than 50% from an all-time high of $ 64,895. Bitcoin has traded in a wide price range from $ 30,000 to $ 40,000 since mid-May, and on June 22, briefly fell below $ 30,000. on the morning of July 20, bitcoin fell below $ 30,000 for the first time in almost a month and is trading at $ 27,900. According to Glassnode analysts, the next level of price support is at $ 26,500.
Glassnode also found that 33% of BTC in circulation “currently has an unrealized loss.” This means that one third of the coins were purchased at a price above $ 30,000. Since the price of a crypto asset first surpassed this mark in 2021, we are talking about short-term holders.
For long-term holders, the situation is better, even if they bought additional coins closer to the peak of the BTC price. According to Glassnode, these users control 75% of the supply and 92% of those coins remain profitable. Long-term holders are forecast to control 80% of supply by September if current trends continue.
Lack of liquidity can cause the price to rise again. As analysts at Glassnode note, “the bullish price decline has historically been driven by long-term holders owning 65% (2013), 75% (2017) and 80% (2020) of supply.” As the supply decreases, the price rises, however, losing coins “may well generate pressure from sellers.”