Bitcoin’s ‘Black Monday’ and everything about the final decline

Bitcoin, the largest cryptocurrency is displaying a few positive signs above the $20,000 support. At press time, BTC showcased a 5% surge as it traded around the $21k mark. Although, the risk is still at large as on-chain data showed that investors over the past three-day period exited positions who acquired BTC at much higher prices.

Rock bottom preview

Bitcoin market participants stood near historically high financial pain thresholds. Investors exited Bitcoin positions worth a record $7.3 billion over the past three days as per analytical firm, Glassnode. In fact, the last three consecutive days recorded the largest USD-denominated Realized Loss in BTC’s history.

Source: Glassnode

As Bitcoin price crashed, investors quickly sold off roughly 555,000 BTC in the $23,000-$18,000 price range as many sellers had originally purchased BTC at much higher prices, according to research firm Glassnode. Here, losses ranged between $1.5 billion and $2 billion each day.

Source: Glassnode

What about the ‘loyal’ holders?

Even the long-term holders parted their ways with the king coin. Notably, this included 178,000 BTC held by Long Term Holders (LTH), with some of the coins sold acquired at $69,000 – the price that marked Bitcoin’s all-time high in November 2021. This group of sellers took a -75% hit to their investment.

Additional data from the analytics firm shows that long-term holders (LTHs) also took a deep capitulation during this record loss taking.

Investigating the profit and loss by Long-Term Holders sending coins to exchanges, we can see a deep capitulation took place.

A few #Bitcoin LTHs even bought the $69k top, and sold the $18k bottom, locking in -75% losses?.

Total LTH losses 0.0125% of Market Cap per day.

5/9 pic.twitter.com/bTCvuciUMX

— glassnode (@glassnode) June 19, 2022

In addition to this, Short-Term Holders (STH) too took on heavy losses. The STH-SOPR reached levels equivalent to the November 2018 bear market capitulation event.

Source: Glassnode

Almost all wallet cohorts, from ‘Shrimp to Whales’, held on to massive unrealized losses, worse than March 2020. Currently, the least profitable wallet cohort holds 1-100 $BTC and has unrealized losses equal to 30% of the market cap. To add to this grim scenario, BTC falling below the 2017 $20k ATH, gave rise to another narrative.

Bitcoin may be near a temporary bottoming out point because the cryptocurrency has historically bottomed out when its Percent Supply in Profit (PSP) is 40% to 50%.

Source: Glassnode

Needless to say, in such a condition, BTC investors’ conviction is seriously being put to the test.