- Some holders of the coin have been hit with one of the biggest losses since 2022
- Long-term holders remain more profitable than their short-term counterparts, indicating BTC is still in a bull phase
According to a recent report from Glassnode, Bitcoin’s [BTC] The crash played a major role in causing one of the biggest losses since the 2022 bear market. In fact, the price of BTC has fallen 14.45% in the past 30 days.
In the report the on-chain analytics platform focused on short-term holders (STH). These holders refer to those who have held Bitcoin for less than 155 days. Specifically, many STHs became loss-making for about 90 days due to Bitcoin’s crash.
Are weak hands in trouble?
Compared to the past three years, this was one of the largest financial losses suffered by holders. As a result, Glassnode noted:
“Comparing to market conditions in the second and third quarters of 2021, many more significant short-term holders experienced a much more significant duration of 70 consecutive days of acute financial stress. That period was severe enough to break investor sentiment and gave way to the destructive bear market of 2022.”
Source: Glassnode
However, this does not mean that Bitcoin’s crash ultimately plunged the coin into a bear phase.
Evidence of this sentiment can be highlighted by the MVRV Long/Short Difference. MVRV stands for Market Value to Realized Value. This metric measures the profitability between long-term holders and short-term holders.
Bulls stressed by Bitcoin’s shenanigans
Negative values indicate that short-term holders will realize higher profits than long-term holders. If this is the case, Bitcoin has entered a bear market.
However, if the difference is positive, it means that long-term holders will realize higher profits than short-term holders when they sell.
At the time of writing, the MVRV Long/Short difference was 14.08%.
Although it was low compared to previous months, it does not mean that Bitcoin’s crash has forced the coin into a bear phase. Instead, the coin appears to be undergoing an inevitable bull market correction.
Source: Santiment
Furthermore, the report highlighted the losses suffered:
“If we zoom in specifically on short-term holders’ losses, we can see that this cohort locked up a total realized loss of ~$595 million this week. This is the biggest loss event since the 2022 cycle low.”
Furthermore, while admitting that the bulls were under pressure, the realized P/E ratio revealed that profitability was virtually non-existent. If the ratio is between 0.50 and 0.75, it generally means that Bitcoin is in a correction phase of the bull market.
Unfortunately, by July 8, the value had fallen to 1.81, implying that investors were largely skeptical about the crypto’s potential. If this is not checked or the price is not allowed to bounce, it could force BTC into a bear phase.
Source: Glassnode
At the time of writing, Bitcoin was valued at $57,848, after a very insignificant increase in the past 24 hours.
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If the price registers a bigger increase, Bitcoin’s crash could soon be a thing of the past. However, if this is not the case, BTC holders risk becoming weaker.