Long-Term Bitcoin Holders Are Currently Realizing Zero Profit – Glassnode

  • Bitcoin is down by 37% over the year
  • The USD has inflated by 8.5% over one year
  • Whales have moved 70,000 bitcoins in the past 3 days
  • Historically, there is a significant decline in the LTH Cost Basis
  • Downtrend may subsist for BTC for months

Bitcoin is trading at $35,906, a loss of 9.17% in the past 24 hours. This is according to data available at Coinmarketcap. The coin has faced uncertainty in the past days which has seen a slump that market analysts refer to as a correction. On a long-term assessment, BTC is down by 37% over the year, having traded at $57,400 by this time in 2021. In comparison, the USD has inflated by 8.7% over the past one year.

In effect, holders of both currencies are down by 42% with BTC contributing the most in the volatility and loss. This is seen from Glassnode data, which also shows a redistribution of 70,000 bitcoins in the past 3 days. This resulted in an inflow of 10,000 bitcoins to centralized exchanges.

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This inflow is the result of movement of coins from wallets containing between 1000 – 10,000 bitcoins within the same period. The same data shows that long-term bitcoin holders are capitulating as seen from the spreading divergence in buy (blue) and sell (pink) chart of the spent price and cost basis.

 

According to Bitcoin Archive, $165 million in BTC was liquidated yesterday, May 5, 2022. This is the highest seen in months which a market analyst, Market Yoda described as a reflection of the fact that Bitcoin is not the people’s coin.

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Will You Buy The Dip Now?

There seems to be a consensus among market watchers that the price of BTC is primed for a bounce after weeks of correction. Speaking on the recent market slump, aQua @PayneResidence wrote that:

“Here’s an update on the Monthly RSI. It’s very close to the green zone. Based on the past, buying inside of the green zone is good for the long term. BTC will be in downtrend for a few more months (maybe till Q4) and then start to recover.”

With the RSI of the BTC/USDT chart below 30 at the time of filing this report, we can infer that the cryptocurrency is in the oversold region and the expected bounce will occur. This is just a matter of time. We expect that this will be a short-term recovery.

The Implication

With all that fund moving into centralized  exchanges, it is possible that the market will be in the downtrend for weeks or months. It is also likely that the whales are seeking to re-enter at a lower price. So we should really expect lower prices for BTC unlike the general perception of the analyst

 

Author: Jinka Kamma

Jinka Kamma is passionate about the prospects of blockchain and the freedom cryptocurrencies afford people across borders. He holds small amounts of bitcoin and tether.