Realized losses in the Bitcoin market have reached their highest level since the FTX crash in 2022. On-chain data suggests that investors have resorted to panic selling, particularly following the sharp price drops in recent weeks, largely fueled by short-term investments.
Analysis: Bitcoin Realized Losses at Highest Level Since FTX Crash
The analysis notes that short-term investors, i.e. addresses that have purchased Bitcoin in recent months or weeks, are the main drivers of the current selling wave.
This group of investors quickly closed positions in response to price declines, dramatically increasing their realized losses. Glassnode emphasizes that such “capitation sales” are typically seen during periods when the market's weakest hands are liquidated.
The report notes that the speed and magnitude of position closings during the decline indicate a significant weakening of the marginal demand side of the market.
A significant number of new investors who recently entered the market found themselves unprofitable after the price pullback, closing their positions and exiting the market. This suggests a loss of confidence among short-term buyers, and the selling pressure is largely coming from this segment.
According to Glassnode, the current picture reveals that Bitcoin is going through a critical correction process and this breakdown in investor behavior may continue to keep the market structure under pressure in the short term.
*This is not investment advice.
