On-Chain Data Shows Most Bitcoin Holders are Selling at a Loss

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Amidst the backdrop of high global inflation, Bitcoin’s value has been plummeting, prompting crypto investors to seek refuge in stablecoins. Over the past three days, the price of Bitcoin has experienced a significant drop of over $10,000, settling at around $26.2k on Wednesday. 

Meanwhile, the demand for stablecoins, particularly Tether USDT, has continued to surge, with the trading volume reaching approximately $32 billion on Thursday.

Bitcoin Holders Seek Safety in CEXs

According to Glassnode, a renowned on-chain crypto insight platform, an increasing number of Bitcoin holders are depositing their coins in centralized exchanges, even if it means suffering losses. Interestingly, Glassnode’s data reveals that short-term holders (STHs) outweigh long-term holders (LTHs) in terms of depositing coins at a loss.

Glassnode Highlights P/L Ratio

Glassnode’s analysis brings forth fascinating insights. The platform’s observations indicate a positive bias of 1.73 among LTHs, indicating profitable inflows for this group. Conversely, STHs exhibit a negative bias of 0.69, similar to the market-wide bias of 0.7, suggesting that STHs are currently dominating exchange inflows. 

Glassnode utilizes the profit/loss ratio (bias) of Bitcoin deposit volume to centralized exchanges as the basis for these conclusions.

When assessing the profit/loss ratio (bias) of #Bitcoin deposit volume to exchanges, we note a current negative bias of 0.7, suggesting coins are flowing into exchanges at a loss. pic.twitter.com/6dYAbsFdyg

Prepare For More Pain Ahead

Considering the technical aspects, it appears that the crypto market has potentially completed its rebound phase following last year’s bearish outlook. Presently, the market, spearheaded by Bitcoin, seems to be caught in a multi-quarter consolidation phase, awaiting next year’s halving event, which may serve as a catalyst for a new macro bull rally.