Only 16.3% of Short-Term Bitcoin Investors Are in the Black Following Recent Market Fluctuations

As per the latest weekly analysis from Glassnode, only 16.3% of short-term holders (STH) of Bitcoin are presently in a profitable position. This “percent supply in profit” metric examines the on-chain history of each Bitcoin to determine its last transfer price. If the last selling price is lower than the current market price, the coin is deemed to be in profit.

Importantly, this metric acts as an indicator of investor sentiment and market conditions. It operates alongside its counterpart, the “supply in loss,” which makes up the remaining percentage to total 100%. At present, a substantial 83.7% of the STH supply is experiencing a loss, illustrating a challenging situation for these investors.

The STH group includes investors who have obtained their coins within the last 155 days. Recently, this segment has witnessed a sharp decline in their percentage of supply in profit. Prior to the recent downturn, Bitcoin was undergoing a phase of consolidation. As a result, many of these STHs had purchased and traded Bitcoin at those levels, establishing their cost basis.

Nevertheless, the recent decline in Bitcoin’s price has caused a significant reduction in the supply of profit, leaving most of these STHs at a loss. Their financial challenges contrast sharply with the situation of long-term holders (LTHs), whose supply profitability has risen despite the market decline.

The reason for this difference is straightforward: LTHs are investors who acquired their coins at least 155 days ago. Consequently, there is a 155-day delay between when an investor buys their coins and when they are categorized as a long-term holder. Coins purchased five months ago have recently transitioned into this group, and since these coins were acquired at lower prices, they are currently in profit.

Additionally, Bitcoin has experienced a 4% rise in the last 24 hours, elevating its price above the $26,100 threshold. While this is a favorable development, it remains uncertain whether it will significantly impact the circumstances of short-term holders who have been adversely affected by recent market fluctuations.

By closely monitoring these supply-in-profit and supply-in-loss metrics, investors can obtain valuable insights into the evolving landscape of Bitcoin holders and adjust their strategies accordingly.

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