According to on-chain data, 82% of Bitcoin’s short-term supply is in decline. This suggests that capitulation could be imminent.
82% of Bitcoin’s Short-Term Holder Supply is currently in Loss. While the Total STH Supply continues to decline
The latest Weekly Report from Glassnode shows that the supply of BTC STH is at an all-time low. But 82% is still being held at loss.
The “BTC short-term holder supply” is that part of the total Bitcoin supply that has been held for less than 155 days.
Investors who hold this stock are more likely to be able to liquidate their coins during volatility and particularly when there is a capitulation.
The Bitcoin STH Supply in Profit/Loss is an indicator that can be found on the Bitcoin blockchain. It shows the percent distribution of these coins held at profit or loss.
A high proportion of this supply is at risk can lead to more selling pressure on the market. This could be because short-term investors are reluctant to sell.
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Here’s a chart showing the evolution of BTC STH over time:
Source: Glassnode's The Week Onchain - Week 11, 2022| Source: Glassnode's The Week Onchain - Week 11, 2022
The above graph shows that the Bitcoin STH supply is in a steady downtrend throughout the entire history of the currency. It currently stands at an all-time low. The decrease in this supply happens when some of the coins mature beyond the 155-day cutoff, thus becoming part of the “long-term holder supply” instead.
Short-term crypto holders are prone to sell-side pressure and can cause a significant drop in the value of their coins. This can make it bullish for the cryptocurrency’s price.
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Despite the fact that supply is very low, 82% are currently at loss. These coins are still worth around 2.5 million BTC despite a decline in overall supply. This can put significant pressure on the market.
The Bitcoin market continues to be affected by macro-economic uncertainties such as the Russian invasion in Ukraine. Short-term Bitcoin investors may eventually give up and surrender if their coins continue to fall or get deeper.
BTC Prices
At the time of writing, Bitcoin’s price floats around $38.5k, down 1% in the last seven days. The crypto’s value has dropped 10% over the last month.
Below is a chart showing the change in BTC’s price over the past five days.
BTC price appears to have been consolidating for several days. Source: BTCUSD on TradingView| Source: BTCUSD on TradingView
Unsplash.com's featured image. Charts by TradingView.com. Glassnode.com's charts.