Individuals acquiring Bitcoin around the time it achieved a $109,000 record high in January are currently experiencing panic selling as the cryptocurrency faces a downturn, according to the blockchain analytics company Glassnode, which does not dismiss the possibility that Bitcoin could drop to $70,000.
In a markets report released on March 11, Glassnode indicated that a recent wave of selling from primary investors has resulted in “intense loss recognition and a moderate capitulation scenario.”
Investors with short-term holdings have exited as Bitcoin fell from its peak
The increase in purchasers paying elevated prices for Bitcoin (BTC) over recent months is demonstrated by the short-term holder realized price — the average acquisition price for those who have held Bitcoin for less than 155 days.
In October, the short-term realized price was $62,000. At the time of this report, it stands at $91,362 — an increase of approximately 47% over five months, as per Bitbo data.
Currently, Bitcoin is trading at $81,930, according to CoinMarketCap. This results in the average short-term holder facing an unrealized loss of about 10.6%.
Bitcoin has decreased by 5.90% over the last week. Source: CoinMarketCap
Glassnode noted that the realized price for short-term holders indicates that “market momentum and capital flows have shifted negatively, indicating a decline in demand strength.”
“Investor uncertainty is impacting sentiment and trust,” it further stated.
Glassnode asserted that short-term holders are “substantially underwater” between $71,300 and $91,900 and cautions that Bitcoin may drop as low as $70,000 if selling continues.
“The likelihood of establishing a temporary support level in this area is significant, particularly in the short term,” Glassnode remarked.
Bitcoin short-term holders are “substantially underwater” between $71,300 and $91,900. Source: Glassnode
Market analysis firm 10x Research categorized it as a “classic correction” in a note dated March 10, indicating that since Bitcoin’s drop below $80,000, “roughly 70% of all selling originated from investors who acquired within the last three months.”
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On the same day, BitMEX co-founder Arthur Hayes mentioned that Bitcoin could retest the $78,000 price point and, should that fail, could subsequently drop to $75,000.
Glassnode detailed that a similar selling pattern in Bitcoin was observed in August when it declined from $68,000 to around $49,000 due to concerns about a recession, disappointing employment statistics in the United States, and sluggish growth of major tech stocks.
Nevertheless, Bitcoin has surged 7.5% in the last 24 hours as the US market stabilized on March 11 after a significant drop the previous day when US President Donald Trump refused to eliminate the possibility of a recession.
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This article does not constitute investment advice or recommendations. Every investment and trading action carries risk, and readers should perform their own research before making a decision.