Last week, the cryptocurrency market experienced a sudden and sharp drop and Bitcoin fell to $25,000.
While this decline increased the rumors that the bear market was continuing, investors who were caught unprepared for the fall suffered great losses.
At this point, over $ 1 billion long positions were liquidated, while BTC investors also suffered a loss.
Stating that about 88.3% of short-term Bitcoin investors are at a loss, Glassnode stated that this shows that an average of 2.26 million BTC is currently kept at unrealized loss.
“Bitcoin bulls were caught off guard this week as the biggest single-day sale of the year sent BTC prices below $25,000.
This drop ended the historically low volatility period and changed the crypto market outlook from flat to negative.
On the other hand, liquidation in the futures markets seems to be the catalyst, but a bigger concern is that 88.3% of short-term Bitcoin investors currently hold BTC at an unrealized loss.
While long-term Bitcoin investors are not affected by the current drop, it is considered normal behavior for this drop to affect short-term investors.”
#Bitcoin bulls were caught off guard with the largest sell-off in 2023 sending $BTC below $25k
A deleveraging in futures markets is the likely catalyst, however a bigger concern may be the 88.3% of Short-Term Holder supply now held in an unrealized loss.https://t.co/Nhr6WkW0CY pic.twitter.com/YqOp4o9nRE
— glassnode (@glassnode) August 21, 2023
Commenting on the source of the decline in Bitcoin, Glassnode analysts stated that the decline was not caused by rumors spreading in the market or macroeconomic developments.
According to analysts, this decline was due to leverage reduction and position clearing.
BTC continues to trade at $26,063 at the time of writing.
*Not investment advice.
