Bitcoin: Despite crossing $20k, short-term holders bleed dry this bear season

ambcrypto.com:

Bitcoin’s [BTC] rejection of the $20K level last week led to the suffering of short-term holders. As per a latest Glassnode report short-term holders of the asset suffered significant unrealized losses. 

HODLers have remained consistent and have continued to hold on to their supply despite the turbulence in the market. On the other hand, these holders were more interested in the best entry and exit prices.

Furthermore, according to Glassnode, these holders were “responsible for the majority coin movement, with a heavy concentration around the current market price.”

For the king coin, Glassnode found further that there exists a large supply air gap below the $18,000 price level. This supply gap extends to the $11,000- $12,000 price level. Should the price of BTC fall below the current cycle low, a significant amount of short-term holder coins will be plunged into unrealized loss. 

Commenting on the impact of this on the general market, Glassnode stated that it “ may exacerbate downside reflexivity and trigger yet another wide-ranging capitulation event.”

Source: Santiment

As stated above, short-term holders were more interested in the best entry and exit points than holding on to their supply. As a result, as the price of BTC declined further, short-term holders’ profitability fell as well. According to Glassnode, as these declines continue, “a point is reached (where) STH (short-term holders’) coins are clustered around spot prices, and thus their cost basis is in-phase with the market.” 

As a result of the non-stop fall in the price of the asset, the profitability of short-term holders of BTC has remained “compressed” for the last 431 days. This, according to Glassnode, has been the longest duration in any bear market cycle