Long-term bitcoin holders are suffering the biggest losses since the March 2020 capitulation and the 2018-2019 bear market, but they may have to keep waiting for relief.
According to Glassnode, the cumulative realized losses from long-term holders (LTH) of Bitcoin (BTC), calculated by measuring the value of coins deposited on exchanges, exceeded 0.006% of market capitalization by May 29. week online report from 6 June.
However, sharp losses may continue for some time if historical loss patterns in previous bear markets repeat. From 2018 to 2019, LTH losses peaked at 0.015% of market capitalization, and these losses continued for about a year. Current losses for long-term traders are observed for only about a month.
Glassnode writes that LTH losses now resemble losses in previous bear markets, but they must continue for a longer period of time before they become truly comparable. The report says:
“LTH losses on coins deposited on exchanges have now reached a magnitude comparable to previous bear markets. However, we don’t have a duration component yet.”
Glassnode defines LTH as a holder who has not moved their coins for at least 155 days. However, anyone who bought BTC before December 2019 will still be able to invest… for now.
It is also worth noting that in both 2019 and 2020, prices recovered quickly, rebounding from their lows. Cryptooshala reported on Tuesday that there will most likely be a capitulation before there is any significant price recovery.
Despite the gloomy price forecast, investment inflows into digital assets such as Bitcoin exchange-traded funds (ETFs) topped $100 million last week. CoinShares June 6 report emphasizes that most of the inflow was from America, suggesting that European investors are still bearish at the moment.
Amid Crypto Bear Market, Institutional Investors Buy Bitcoin: CoinShares
CoinShares also pointed out the difference in exchange flows between BTC and Ethereum (ETH). Until 2022, the exchange inflow of BTC was about $506 million, while the net outflow of ETH was $357 million. This suggests that market sentiment for ETH is currently much lower than for BTC.
Bitcoin prices have dropped 5.3% in the past 24 hours to trade at $29,567, according to data from CoinGecko. Ethereum is down 6.7% over the same period, trading at $1,756, down 34% over the past month.
Credit : cointelegraph.com