Bitcoin Volatility Hits Short-Term Holders, Long-Term Profit Outlook Positive
The Essentials in Brief
Despite a recent rise in value, over 80% of short-term Bitcoin holders are still in the loss zone. This is happening while the Bitcoin price hovers around 60,000 dollars. The market’s volatility has hit short-term investors particularly hard, who are now holding their assets at a loss. However, an analysis shows that despite the current challenges, the majority of Bitcoin holders are still recording profits.
Why are short-term Bitcoin holders at a loss?
The recent analysis by AMBCrypto, based on data from Santiment, shows that over 80% of short-term Bitcoin holders are holding their BTC at a loss. The market indicator MVRV (Market Value to Realized Value) has fallen below zero since the beginning of the month, indicating that most short-term holders are suffering losses. On August 5, the MVRV fell to about -13%, which highlights the extent of the losses. By August 18, the MVRV had improved to about -5%, but is still in the negative range.
A Silver Lining on the Horizon
Despite the current challenges for short-term holders, there are positive signals. In the last 48 hours, the situation has further improved, with a rise in the MVRV to around 1%. This positive trend is mainly due to the recent price increases, which have reduced pressure on short-term holders.
Looking at the Big Picture
Shifting the focus from short-term holders to the entire base of Bitcoin holders, a more optimistic picture emerges. Data from IntoTheBlock shows that despite recent price fluctuations, a significant majority of Bitcoin holders are still making profits. Over 80% of all Bitcoin addresses are “in the money”, meaning they hold BTC at a higher price than their purchase price.
Bitcoin Price Development in the Last 48 Hours
At the time of writing this article, Bitcoin has recorded a price increase of over 2%, bringing it to about 60,800 dollars. This follows a nearly 1% increase in the previous trading session. The recent gains have brought Bitcoin closer to a critical resistance level, marked by its short-term moving average around the 60,000-dollar mark.
Our Assessment
The current situation highlights the volatility of the cryptocurrency market and the challenges facing short-term investors. While short-term holders are currently suffering losses, the broader overview shows that the majority of Bitcoin holders are still in a profitable position. This suggests that the long-term outlook for Bitcoin remains positive, despite the short-term turbulence. Investors should, however, be aware of the risks and may want to consider a long-term strategy to navigate through the market’s volatility.
Sources
– IntoTheBlock
– Santiment
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