Bitcoin cuts HODL’s profits. BTC on-chain analysis shows who is “under the line”

---

The price of bitcoin (BTC) is currently around 35% below the historical record (ATH) set in November 2021. As declines deepen, a significant amount of BTC supply shifts from unrealized profit to unrealized loss, notes Glassnode in its latest on-chain analysis. Approximately 5.7 million BTC is currently “under the line”, which translates into 30% of the total supply in circulation.

• The percentage of BTC supply realizing profits has hit the lowest levels since the holidays of 2021 and 2020
• On the other hand, the realized profit is in line with the pandemic lows as the realized loss continues to grow
• However, the on-chain analysis suggests that there is a bullish divergence on the market (low BTC price on the spot market, but an increase in the value of important indicators)
• More similar and interesting articles can be found on the Comparic.pl home page

Bitcoin owners are below the line. On-chain analysis of profitability on the BTC market

While bears are putting pressure on holders that are not making a profit, the bulls are defending a historically significant level of the percentage supply of profit found. Value has been strongly defended twice in the past few years:

• May 2020 – July 2020, a calm recovery period from the extreme downward move from the Covid-19 panic.
• May 2021 – July 2021, the period of tremors and accumulation following the historic deleveraging event.

– A response at this level is likely to provide some insight into the medium-term direction of the bitcoin market. Further weakening could motivate those under the dash to final surrender, while a strong bullish impulse could offer much-needed psychological relief and put more coins back into unrealized profit Glassnode comments.

Glassnode claims that you can evaluate the psychology of the entire market bitcoina observing who is parting with their coins and why and when such transactions take place. The chart showing the percentage of transfer volume in profit shows the proportion of coins issued on-chain that have recently been transferred at lower prices, acting as an indicator of fear and greed on a macro scale.

• The percentage of the transfer volume in profit> 65% signalsthat a large amount of coins is spent at a profit. Historically, this occurs during bullish impulse when holders are taking advantage of market power.
• The percentage of transfer volume in profit <40% signalsthat the on-chain volume is dominated by coins purchased at higher prices. Historically, this occurs during market downturns and particularly during market surrender.

Last week’s sell-off was less than 40% of the volume spent on a profit, reaching a level that historically coincides with the surrender. Previous descents to this level were preceded by a bullish trend reversal and a period of general risk-on behavior that rewards risk appetite.

You can invest in cryptocurrency CFDs with the Plus500 broker, among others. Create an account and start trading.

START INVESTING

72% of retail investor accounts lose money when trading CFDs with this provider. Consider whether you can afford the high risk of losing your money.

HODLs BTC do not want to take profits, while speculators take losses

The low spending of profitable coins in the Realized Profit chart shows the profitability of activated BTC (transferred between portfolios) converted into USD.

Profit holders show a clear reluctance to spend coins, with constant Realized Profit values ​​below $ 1 billion / day. Faced with turbulent and unconvincing price action, this signals that this group of HODLs are patiently waiting for higher prices to release their supply.

Rising realized gains, especially above the $ 1 billion mark, accompanied by positive price performance, signal the absorption of the coins by demand and are an indicator to watch in the weeks to come.

Meanwhile, the Realized Loss Index remains high and on an upward trend as those below the mark are issuing coins that were purchased near the market peak in October and November.

On average, the daily realized losses are around $ 750 million, which is comparable to the lowest levels of surrender in May-July 2021. Continuity in realizing large losses indicates anxiety in the market, but also reflects the estimated inflow of demand that issued coins will have to absorb. .

– Persisting periods of large realized losses require the bulls to prove sufficient demand support. A macro-fall in the value of realized losses would be a more encouraging signal to bulls as it is an early indicator of the seller’s depletion Glassnode comments.

Bitcoin is in the oversold zone, BTC divergence is bullish

The standoff situation between price action, realized gains and realized losses is summarized in a 28-day realized loss (Market Realized Gradient, MRG) chart that compares the momentum of Market Capital (speculative value) with Realized Capital (real capital inflow).

• Positive values ​​signal that the bull trend is strong and the upside momentum in the spot markets is increasing.
• Negative values ​​signal that the bearish trend is in the game and the momentum favors the bears.
• High values ​​signal that bitcoin is likely to be overbought (positive) or oversold (negative) as market valuation deviates from more fundamental inflows or outflows of capital, respectively.

The trend and MRG values ​​indicate that the current market valuation is approaching an equilibrium point with capital inflows, with a developing monthly bullish divergence. A strong break above zero will signal a bullish turn in the game, while a break down will signal momentum is accelerating downwards.

The author also recommends:

–