Short-Term Bitcoin Holders Face Unrealized Losses, Glassnode Report Indicates

Short-term holders are experiencing unrealized losses and will add to the sell-side pressure if BTC continues to drop in value.

A Glassnode Insights report indicates that short-term bitcoin (BTC) holders face unrealized losses, adding pressure to the specific holder base and introducing risk to the BTC market. Still, the overall BTC market has realized minimal losses, dropping about 22% from its new all-time high (ATH) set a few months ago. Long-term holders are not experiencing the same strain as their short-term counterparts.

“However, even for this cohort, the magnitude of their Unrealized Losses relative to the market cap is not yet in full-scale bear market territory and more closely resembles the choppy 2019 period,” the report said. Glassnodes’ findings revealed that new BTC investors who bought BTC within the last six months would continue to hold their unrealized losses until the asset’s spot price reclaims an STH price of $62,400.

“The loss-taking events are not yet at the extreme levels seen during the mid-2021 sell-off or the 2022 bear market. However, the gradual higher drift does indicate some fear creeping into investor behaviour patterns,” Glassnodes elaborated. Long-term holders have registered profits six times greater than the losses experienced by short-term holders, making the latter vulnerable while the former shows resilience to price drops.

The Sell-Side Risk Ratio Indicates Short-Term Holders Are Not Selling, Yet

While analyzing the Sell-Side Risk Ratio, the report detailed minimal profit- and loss-taking activity. Holders across the BTC market are transacting their holdings at prices similar to what they acquired them for. It added, “The Sell-Side Risk Ratio has declined into the lower band, suggesting that most coins transacted on-chain are doing so close to their original acquisition price. This suggests a progressive saturation of profit and loss-taking activities within the current price range.”

Source: Glassnode Insights

However, that indication often precedes volatility and turbulence as the market searches for balance. Short-term holders will add to the sell-side pressure if BTC’s price declines. On the other hand, long-term holders hang on to their holdings during downtrends.