Short-term Bitcoin (BTC) holders are largely in the red after the recent price slide, according to on-chain data. The leading cryptocurrency by market value fell over 10% to $26,200 last week, registering its worst performance since November. Glassnode’s data tracked that 88.3% of the supply controlled by short-term holders (STHs) or entities owning wallets that do not hold coins for over 155 days, has dropped into unrealized losses. “Sharp upticks in STH Supply in Loss tend to follow ‘top-heavy markets’ such as May 2021, Dec 2021, and again this week,” Glassnode’s weekly newsletter said.
The flow of STH-owned coins, with acquisition costs higher than the going market rate, into exchanges has recently increased. This suggests that the STH cohort are both largely underwater on their holdings and increasingly price-sensitive, according to Glassnode. Ilan Solot, co-head of digital assets at Marex Solutions, said the unrealized losses of short-term holders are one of the critical problems for the market right now. “Almost 90% of short-term holders (< 155 days) are suffering unrealized losses, which often correlates with selling pressure,” Solot said. The current market set-up for BTC is fragile due to short-term holders being underwater in both price and narrative. With rising bond yields and tighter liquidity conditions, the spot-ETF narrative has shifted to “still decent odds of approval but delayed.”