Short-Term Bitcoin Holders Are At Risk, While Average Investors Enjoy Profits Despite Bumpy Ride: Analysis

The average Bitcoin BTC/USD investor remains profitable despite ongoing downward pressure, according to blockchain analytics firm Glassnode.

Short-term holders, however, are at risk.

What Happened: In a detailed analysis, Glassnode considers the short-term holder cohort to be significantly underwater on their holdings. The spot price is trading 22% below the all-time high — a relatively shallow drawdown compared to historical bull market regimes.

The total unrealized losses amount to just 2.9% of the Bitcoin market cap, a historic low. This indicates that the aggregate investor remains relatively profitable, despite continued price declines.

The firm also noted that the average new investor is holding an unrealized loss. Until the spot price reclaims the short-term holder cost basis of $62,400, there is an expectation for further market weakness.

Also Read: Bitcoin Could Tumble 15-20% If Fed Cuts Interest Rates As Expected: Analysts Lay Out The Bear Thesis

Why It Matters: The short-term holder cohort, representing new demand in the market, appears to be shouldering the majority of the market pressure. Their unrealized losses dominate overall, and the magnitude has consistently increased over the last few months.

However, 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.

From the perspective of investor reactions, Glassnode stated that unrealized losses provide crucial insight into the pressure that market investors are experiencing. Also, loss-taking events are elevated and are starting to trade towards higher levels as the market downtrend progresses. This indicates some fear is creeping into investor behavior patterns.

What’s Next: The influence of Bitcoin as an institutional asset class is expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.

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