Bitcoin has experienced a meteoric rise, going from around $16,500 in late 2022 to a new all-time high of $73,750 in March 2024, delivering over 300% returns to traders and investors. Even those who entered the market in September last year would have seen 125% year-on-year gains.
However, the past few months have been turbulent, with Bitcoin trading in a range around $15,000 and making lower lows and lower highs, indicating a slow and steady decline. Analysts at Glassnode state that while the market has seen this continuing downward pressure, most investors are still in the green, with "relatively small unrealized losses compared to prior cycles".
The divide is between long-term and short-term holders. While long-term holders remain stable, short-term investors are most at risk, with the "STH MVRV Ratio (Short-Term Holder Market Value to Realized Value)" now below 1.0, indicating losses comparable to levels seen during the post-FTX failure recovery in August 2023. Until the spot price reclaims the STH cost basis of $62.4k, further market weakness is expected.
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