Bitcoin Top Buyers Panic Sell At Loss As BTC Slips Under $93,000

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As a seasoned crypto investor with a decade of experience under my belt, I can’t help but feel a sense of deja vu when I see the latest Bitcoin short-term holders capitulating following the drawdown under $93,000. It seems like history is repeating itself, and we’re witnessing another round of panic selling among the newbies in the market.

Data from the blockchain indicates that Bitcoin investors who bought near the peak are now selling off, or “capitulating,” as the price of Bitcoin falls below $93,000.

Bitcoin Short-Term Holders Have Just Sold Big At A Loss

According to an analysis in a recent CryptoQuant Quicktake post, the most recent drop in BTC prices has caused unease among those who own Bitcoin for short periods, typically defined as investors who purchased their tokens no more than 155 days ago.

The Set Under Analysis encompasses fresh investors and dealers in the industry, thus often regarded as the less experienced or passive segment of the market. Those within this group who manage to persist beyond the 155-day threshold without executing a single trade are promoted to the rank of “Long-Term Holders” (LTHs).

In my research, I’ve observed yet another round of panicked selling among the STH group following the recent market dip. While this phenomenon is not unprecedented, what sets this situation apart might lie in identifying the particular segment of STHs that are driving this selloff.

The metric that the quant has provided is known as “Profit/Loss of STH to Exchanges.” This term signifies if the participants in this group are moving their cryptocurrency to exchanges with a gain or a loss.

This metric follows transactions to exchanges primarily because it’s common for investors to carry out trading-oriented tasks on these main platforms, which function as central hubs for such activities.

Now, here is the chart for the STH Profit Loss to Exchanges over the last few days:

The graph indicates that the profit/loss ratio for Bitcoin stored-to-huobi (STH) experienced a significant downturn coinciding with Bitcoin’s fall below $93,000.

This implies that these investors have been frequently realizing significant losses, as they’re the ones who would sell at a price lower than the asset’s historical high. Given that current prices are above the asset’s entire history, only those who bought at higher prices can incur such losses.

As an analyst, I’ve observed that a surge or ‘spike’ in the indicator, particularly one colored red, suggests some latecomers have chosen to exit their positions on the asset. Historically, such a move, known as ‘capitulation,’ has been followed by market bottoms for Bitcoin. This pattern often indicates a shift of capital from inexperienced or overly optimistic investors into more stable hands.

It’s yet uncertain if the recent drop in STH prices significant enough to mark a price floor for Bitcoin.

Additionally, it’s worth noting that those holding steadfastly in the market, often referred to as ‘diamond hands’, have also been partaking in substantial selling lately, according to information from the on-chain analysis company, Glassnode.

While Bitcoin ST Holders might sell due to various reasons, these other investors have been patiently reaping substantial gains. Consequently, their selling behavior differs.

BTC Price

Earlier today, Bitcoin dipped below $92,000, but it appears to have experienced a slight recovery currently standing at around $92,600. For the time being, anyway.

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2024-11-27 15:11