Bitcoin (BTC) was trading at $58,121, down nearly 22% from All-Time-High of $73,835 reached on March 14. Despite the recent price decline, analysts say the Medium Bitcoin investor remains “relatively profitable.”
According to market research firm Glassnode, data on Bitcoin investor returns shows that this is still a relatively small decline compared to historical bull cycles, suggesting that investors overall remain in a relatively strong financial position.
Looking at the ratio of total unrealized profits to unrealized losses, Glassnode analysts found that “profits still outweigh losses by a factor of 6.” This ratio has remained above its current value for about 20% of trading days, highlighting the strong financial position of the Medium Bitcoin investor.
“On Medium, BTC investors are holding relatively small unrealized losses compared to previous cycles, suggesting a generally favorable position.”
Meanwhile, the bull market appears to have paused. Short-term holders—those who have held BTC for less than 155 days—are bearing the brunt of the pressure as prices remain low.
The STH group has experienced significant unrealized losses “with a continuously increasing scale over the past few months,” the report noted. However, when analyzing these losses relative to the market, Glassnode analysts found that they have not yet reached full-blown bear market territory.
The chart below shows that STH's realized market value ratio (MVRV) has dropped below its Capital value of 1.0 and is trading at similar levels as August 2023, during the recovery following the FTX crash.
“This tells us that the Medium new investor is experiencing unrealized losses.”
The report also highlights that every age group within the STH group is currently suffering unrealized losses.
Bitcoin Price Needs to Reclaim STH Cost Basis
Data from TradingView shows Bitcoin trading at $58,121, nearly 7% lower than STH’s base price of $62,400.
Glassnode analysts warn that unless the spot price regains its STH cost basis, “there is an expectation of further market weakness.” The analysts add that the actual market Medium around the $51,000 demand zone remains a key area of concern that must be maintained for the bull market to continue.
“In the event of a local downturn, the $51,000 level remains a key level that needs to be held for further upside.”
Philip Swift, CEO of Bitcoin Magazine Pro, made similar comments, saying that Bitcoin’s spot price is currently “below its original base price for many short-term investors.”
In a September 3 newsletter, Swift explained that the current scenario reflects the price action of August and September 2023 when the price is down nearly 60 days from the actual value of STH.
“Until that changes and Bitcoin price rises back above this level, the market will remain volatile as short-term investors continue to hold paper losses.”
Swift added that for the bullish momentum to continue, prices must rise back above the STH cost basis, “which would help restore much-needed confidence in the market.”
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