The Current Landscape for Long-Term Bitcoin Holders

Long-term Bitcoin holders (LTH) are feeling the burn, with losses that have reached levels unseen since the tumultuous days of March 2020. According to Glassnode’s latest report, these losses amounted to over 0.006% of the market capitalization by May 29. If you thought the bear market was just a phase, think again!

The Historical Context

To understand the magnitude of these losses, it’s crucial to take a walk down memory lane. Back in 2018–2019, LTH losses hit a staggering 0.015% of the market cap, and they didn’t just happen overnight; they persisted for almost a year. Currently, what we’re witnessing has only been brewing for around a month. Just a hiccup compared to the marathon of losses from past bear markets.

Comparing This Bear Market to the Past

Glassnode has made an interesting comparison between current LTH losses and losses from earlier bear markets. They note that, although the current losses resemble previous downturns, we’re lacking that all-important duration component. The longer these losses drag on, the more deeply entrenched they become in the annals of Bitcoin history.

Who Exactly Are These Long-Term Holders?

The definition might sound like something out of a cryptographic novel. Glassnode specifies LTH as individuals who haven’t moved their Bitcoin for at least 155 days. Surprisingly, anyone who scooped up Bitcoin before December 2019 still has a cushion of profits … for the moment. But will that cushion hold?

Can Relief Be Far Away?

While historical patterns often tell a grim tale, there’s always the hope of a recovery. Back in 2019 and 2020, prices bounced back from their lows with impressive zeal. Still, there are whispers of a potential capitulation event looming on the horizon before any significant price recovery can be expected.

Institutional Movements Amidst Uncertainty

Despite the gloomy price projections, there’s a silver lining for Bitcoin. Digital asset investment products, such as Bitcoin ETFs, saw inflows exceeding $100 million last week. CoinShares’ June 6 report shed light on these inflows primarily stemming from the Americas, indicating that European investors still harbor a bearish sentiment. Meanwhile, the flows between Bitcoin and Ethereum are telling a different story, as BTC has netted around $506 million in value through 2022 so far, while ETH has experienced net outflows of $357 million. Might this cryptoeconomy be seeing a shift in sentiments?

The Current Price Picture

As we stand today, Bitcoin prices are down 5.3% in the last 24 hours, trading at approximately $29,567. On the other side, Ethereum has also taken a hit, dropping 6.7% to $1,756, marking a staggering 34% loss over the past month. Ouch!