Bitcoin Investors Lose Record $7.3 Billion in Three Days

How close is Bitcoin to finally bottoming out?

2 min read
Bitcoin is the largest cryptocurrency by market cap. Photo by Kanchanara on Unsplash.

The Bitcoin selloff from Thursday to Saturday marked the largest realized loss ever for the top cryptocurrency by market cap, with investors recording $7.3 billion of locked-in losses.

About 555,000 Bitcoin were traded in the $18,000 to $23,000 range during the three-day span, with many sellers having originally purchased BTC at much higher prices, according to research firm Glassnode.

Short-term holders reached a Spent Output Profit Ratio equal to that of the 2018 bear market, meaning their profits are down overall, while some long-term holders experienced “deep capitulation” after buying at Bitcoin’s all-time high of nearly $69,000 and selling for closer to $18,000, per Glassnode.

“Almost all wallet cohorts, from Shrimp to Whales, now hold massive unrealized losses, worse than March 2020. The least profitable wallet cohort hold 1-100 BTC,” Glassnode reported.

GlobalBlock cryptocurrency analyst Marcus Sotiriou said Bitcoin may be near a temporary bottoming out point because the cryptocurrency has historically bottomed out when its Percent Supply in Profit (PSP) is 40% to 50%.

“It is important to note when looking at this historical data, that Bitcoin has not gone through a period of persistent inflation,” Sotiriou said in a statement Monday. “We may be edging closer to a generational bottom as more forced liquidations occur, but we can not be confident of a sustained uptrend until inflation convincingly slows down.”

Yuya Hasegawa, an analyst at Japanese cryptocurrency exchange Bitbank, also sees more potential downside given that Bitcoin’s PSP is just above 50%.

“Bitcoin’s weekend dip was, to put it simply, not deep enough,” Hasegawa wrote in a report Monday. “Bitcoin still has a downside potential but if its PSP goes below 50%, then the price could finally bottom out.”

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