Bitcoin Newcomers Face 93% Unrealized Losses Echoing FTX Collapse
Harvey Hunter is a Junior Content Creator at Cryptonews.com. With a background in Computer Science, IT, and Mathematics, he seamlessly transitioned from tech geek to crypto journalist.
Bitcoin futures liquidations have purged short-term holders in a $365 million ‘wipe-out,’ leaving unrealized losses at 94%, levels unseen since the FTX collapse.
In an August 7th Glassnode report , the crypto analytics firm confirmed a “statistically significant capitulation” as Bitcoin’s short-term holders (STHs) have come under intense pressure thanks to this week’s BTC price crash. Glassdoor commented:
“97% of all losses can be attributed to Short-Term Holders, and the Long-Term Holder cohort were comparatively unfazed.”
STH entities are those HODLing Bitcoin for 155 days or less, while their counterparts, the long-term holders (LTHs), HODL for more than 155 days.
STHs tend to be far more sensitive to market shocks than LTHs, and this week’s dip to $49,500 was no exception.
At one point, these newcomer entities sold $850 million of Bitcoin at a loss. However, this only scrapes the surface of the overleveraged players that have been removed from the market, according to the report.
The analytics firm likened the significant 97% unrealized losses to those observed around the collapse of the cryptocurrency exchange FTX.
“Short-Term Holders are currently holding the largest unrealized loss since the FTX implosion, which again highlights a point of serious investor stress imposed by current market conditions,” Glassnode summarized.
Just 7% of STH holdings currently sit in profit, echoing the Bitcoin price dip below $30,000 during the sell-offs in August 2023 .
“This is also more than -1 standard deviation below the long-term average
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