The comeback is still not here for Bitcoin, which is falling below the $30K threshold. Most of the BTC sold is at a loss. Long-term investors are holding on to their capital gains.
Pantera Capital’s forecast will not come true. The hedge fund predicted earlier in 2021 that the price of BTC would reach $115,000 in August. Such a price now seems impossible. On the contrary, a new decline is beginning.
On Monday July 19, Bitcoin lost more than 5%, falling back below $30K. At the time of this article’s preparation, the leading cryptocurrency was quoted at around $29,800. And the short-term trend does not point to a recovery.
BTC is sold mostly at a loss.
According to Glassnode, the next major support is around $26,500. For a large proportion of token holders, the current price means a significant loss. Indeed, 33% of the BTC in circulation represents an ” unrealized loss “.
These bitcoins were thus acquired in 2021 for a price higher than 30,000 dollars. In the event of a sale, investors would accept a capital loss. However, they may decide to sell to limit their losses.
The blockchain is currently idling. The daily volume is thus estimated at 5.3 billion dollars. This is far from the 15.5 billion of the 2021 peak. The transaction volume is probably not conducive to selling.
Short-term investors are however resigned to it. “Of the volume of trades that are settling, an overwhelming majority appear to be tokens making losses,” Glassnode notes. Traders are clearly pulling back from a rebound that began with institutional investors.
Demand from institutions is clearly declining. There are several indicators to measure this. The price of the Grayscale Bitcoin Trust, for example, is showing a discount of between 11 and 15%. Another popular institutional product, the Purpose ETF, is experiencing a record outflow of capital.
Not all investors are depressed, however. Long-term holders are still making a profit on their Bitcoin, even if it has been reduced significantly. These holders represent 75% of the Bitcoin in circulation.
Of these tokens, 92% are profitable. Glassnode estimates that by September, if the current trend continues, these long-term holders will hold 80% of the Bitcoin supply. So for them, the accumulation continues.
This is a signal that many traders are hoping for a return of the bull-run. The lack of liquidity tends to push the price up. Bitcoins held at a loss, however, could dampen this prospect by exerting selling pressure.
The bull run that launched past bull markets has historically been triggered by [long-term holders] holding 65% (2x 2013), 75% (2017) and 80% (2020) of the outstanding supply, Glassnode points out.