CryptoQuant: Short-term BTC holders are in the pain zone, most are trading below their cost basis.
On-chain data shows: short-term holders of #BTC (STH) have again fallen into the loss zone. A significant portion of coins purchased over the past few months would now be sold for less than they were bought.
On the chart, the purple zone - periods of profit for STH. There is almost none now: the market has not updated peaks for a long time, and most short-term positions are above the current price.
The red zone - periods of loss for STH. In recent weeks it has been expanding, which means increasing pressure on short-term traders.
STH Realized Price - the "average cost" of short-term holders. Currently, the BTC price is falling below this line, which historically:
- intensifies fear in the market;
- leads to the capitulation of some "weak hands";
- creates opportunities for more patient participants.
In all this, it is important to remember that short-term investors are the most emotional. When they are collectively in the red, the market becomes more susceptible to sharp movements:
- during a decline - the risk of stop-loss triggers and forced sales arises;
- during a recovery - any upward movement can provoke a sharp covering of losses and accelerate growth.
The short-term market segment is currently expressively in the pain zone - about -10% unrealized losses. Historically, such periods have often become turning points, BUT they can also be accompanied by volatility and emotional sell-offs.
