Bitcoin Short-Term Holders in Panic Mode as Nearly All Are in the Red

Bitcoin speculators are dealing with “a degree of panic” as their BTC holdings sit in unrealized loss, according to a recent report by on-chain analytics firm Glassnode.

The report, published on September 17, found that 97.5% of Bitcoin’s short-term holders (STHs) are currently in unrealized loss. This means that their cost basis for BTC is higher than the current market price.

The report also found that the cost basis for STHs who are spending BTC is now below the cost basis of holders. This suggests that STHs are selling their BTC at a loss, which is a sign of panic selling.

“From this perspective, we can see that the cost basis of STHs who are spending fell below the cost basis of holders as the market sold off from $29k to $26k in mid-August,” the report explained. “This suggests a degree of panic and negative sentiment has taken hold in the near term.”

The findings of the report are in line with the overall sense of caution among Bitcoin traders and analysts, with many predicting a test of lower levels still to come.

What is a short-term holder?

A short-term holder is an entity that has held Bitcoin for 155 days or less. Short-term holders are often considered to be speculators, as they are more likely to sell their Bitcoin quickly if the price drops.

What is unrealized loss?

Unrealized loss is the difference between the cost basis of an asset and its current market price. When the market price of an asset is below the cost basis, the asset is said to be in unrealized loss.

What is panic selling?

Panic selling is the sale of an asset at a loss due to fear of further losses. Panic selling can be triggered by a number of factors, such as a sudden drop in the price of an asset or negative news about an asset.