Bitcoin broke below $62k for the first time since February 6 and is now down over 14% on the week and over 50% since printing its all-time high in October last year. Short term holders, those who bought BTC over the past 155 days, are feeling the brunt of this decline. On-chain data from CheckOnChain shows that this group is now selling at the steepest loss-driven pace. 

Short-Term Holders Are Selling at a Record Loss

Bitcoin Short-Term Holder Realized Profit/Loss Ratio is a value-based ratio that measures profit being realized against loss within the under-155-day group. Above zero on this metric means this group is mostly cashing out gains. Anything below zero flips it. At a reading of -1.5, the losses are swamping whatever profit is left on the table, and most notably, no other prior reading has gone this deep. 

The Fear and Greed Index is well within the extreme fear territory with a score of 12 as of this writing and the group that tends to move first when sentiment cracks seem to be heading for the door in size. 

53,800 Coins Hit Exchanges, Zero in Profit 

This week we also saw another metric point to the same direction of short term holders capitulating. Data from CryptoQuant showed that around 53,800 BTC moved from short-term holders onto exchanges within a span of 24 hours with every coin in that batch underwater. That made it the most lopsided flow to be registered so far this year. Coins are usually transferred into exchanges with an intent to sell, so what this metric shows alongside the one above is that there is a fresh wave of loss-bearing supply queuing up alongside the losses that have been realized. 

Capitulation Has Marked Local Bottoms Before

Loss-driven selling at this intensity has often coincided with local bottoms and has shown to indicate a transfer of hands from shaky hands to longer term investors. This is not to say that a deeper drawdown is improbable. Bitcoin is currently undergoing a 50% decline from its highs, and when we compare this dip to previous bull market corrections, we’ve seen prices go down further. That said, the pattern is familiar. 

More BTC is now being held at a loss than in profit. Glassnode data shows that supply in loss has reached 10.5 million BTC compared to 9.8 million in profit. In past cycles, this crossover has coincided with major market bottoms. 

At the same BTC has retraced to the 200 week moving average, a support level reached in every past bear market. 

Whether this turns into another floor comes down to one question. Who is buying the coins these sellers are dumping, and how fast.

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