[Analysis] 73% of Short-Term Bitcoin Holders Are Underwater; Recovery May Take Time
Summary
- 73% of short-term Bitcoin holders are at a loss, suggesting selling pressure could persist even if Bitcoin rebounds.
- He said the current STH-PSIL reading of 73% shows the share of loss-making investors has risen sharply from 51% and 67% seen during the first corrections of past bull cycles.
- Murphy said it took about one year for Bitcoin to regain a full uptrend in 2019, and added that a recovery in this cycle could also take considerable time.
Forecast Trend Report by Period
Seventy-three percent of short-term Bitcoin holders are now sitting on losses, a sign that selling pressure could persist even if the cryptocurrency rebounds.
Murphy, a cryptocurrency analyst, wrote on X, formerly Twitter, on November 15 that the STH-PSIL indicator, which measures the share of short-term Bitcoin holders in loss, had risen to 73%. That means more than seven out of 10 investors who recently bought Bitcoin are now underwater.
During the previous bull cycle, the indicator stood at 51% in the first price correction and 67% in the second, Murphy said. This time, the share of loss-making investors has already jumped to 73% after just the first correction.
A similar pattern was last seen in 2019 and 2020, he added. In the first correction of that period, the share of short-term investors in loss climbed as high as 97%.
Murphy said Bitcoin could need significant time to recover. With a large number of loss-making investors now built up, selling pressure may emerge whenever the token reaches major price levels. In 2019, it took about a year for Bitcoin to return to a full-fledged uptrend.
Uk Jin
wook9629@bloomingbit.ioH3LLO, World! I am Uk Jin.