According to new data from Glassnode, bitcoin is down roughly 55% from its November high, and 40% of holders are now underwater on their investments.
When you exclude short-term investors who purchased bitcoin in the last six months when the price was about $69,000, the percentage rises even more.
In the last month alone, 15.5 percent of all bitcoin wallets have experienced an unrealized loss as the world’s most popular cryptocurrency plummeted to $31,000, tracking the decline in tech stocks. The strong link between Bitcoin and the Nasdaq calls into question the cryptocurrency’s role as an inflation hedge.
Analysts from Glassnode also noted an influx of “urgent transactions” amid this latest sell-off, in which investors paid higher fees, indicating they were willing to pay a premium in order to expedite transaction times. The total value of all on-chain transaction fees paid reached 3.07 bitcoin over the last week — the largest yet recorded in its dataset.
“The dominance of on-chain transaction fees associated with exchange deposits also signaled urgency,” continued the report, further supporting the case that bitcoin investors were seeking to de-risk, sell, or add collateral to their margin positions in response to recent market volatility.
During the sell-off this past week, more than $3.15 billion in value moved into or out of exchanges, the largest amount since the market hit its all-time high in November 2021.
Most wallet cohorts, “from shrimp to whales,” have softened in their on-chain accumulation trends, according to the report, referring to both small-scale and large-scale investors.
Over the previous few weeks, wallets with balances of more than 10,000 bitcoin have been a particularly powerful distribution force.
While retail investors are more confident — those with less than 1 bitcoin are the strongest accumulators, according to data – the accumulation among these smaller-scale holdings is significantly lower than it was in February and March.
Fundstrat Global Advisors predicts a bottom of roughly $29,000 per coin, and investors should acquire one-to-three month put protection on long positions.