The data shows that Bitcoin holders who are long-term have significantly less supply of loss than they did in May-July 2020.
The 15% of Bitcoin long-term holders supply is in loss right now
According to the most recent weekly Glassnode report, 30% of total BTC supply are currently at loss.
The “long-term holder supply” is the part of the total Bitcoin supply that hasn’t shown any movement since more than at least 155 days ago.
The other part of the supply belongs to the “short-term holders.” This cohort doesn’t hold for too long and generally sells before 155 days are up. This supply is usually dominated by active traders.
The LTH supply is then used to count any Bitcoin STH coins older than the 155-day mark.
The relevant indicator here is the “supply in profit/loss,” which looks at each coin on the chain to see how many coins are in profit or loss right now.
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This metric compares the last price at which a coin was moved to its current value. Bitcoins that have a higher price than the current value are considered to be in losses. Otherwise, it’s in profit.
Below is a table that illustrates the loss distributions for the LTHs, as well the STHs.
It looks like there is a fairly even loss ratio between these two groups right now. Source: Glassnode’s The Week onchain Week 16 2022| Source: Glassnode's The Week Onchain - Week 16, 2022
You can see that approximately 15.3% of Bitcoin LTH supply currently is at loss. STHs are also in the red at almost 15%.
Around 35% (or more) of LTHs suffered losses during the bear markets in 2020 and 2018.
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The mini-bear May-July period in last year was characterized by a smaller number of long-term holders who were able to hold coins for a loss.
Market profitability is at a very low point right now. LTHs will not sell with such losses because they are usually price sensitive, but STHs of 15% are less likely to succumb if Bitcoin prices continue to fall.
BTC price
At the time of writing, Bitcoin’s price floats around $42.5k, up 3% in the last week. The crypto’s value has increased by 3% over the last month.
The chart below shows how the currency’s price has changed over the course of five days.
Source: BTCUSD on TradingView| Source: BTCUSD on TradingView
Unsplash.com's featured image. Charts by TradingView.com. Glassnode.com's charts.