It’s been nine months on top of the market, but nearly $2 trillion in capital has been injected in that time, which has taken a toll on the token price.
However, the question still remains whether the market has bottomed out.
CryptoSlate’s analysis of Glassnode’s on-chain data reveals generally positive sentiment from long-term holders. I understand.
Total supply of bitcoins in loss
Long-term Bitcoin holders are those who hold BTC for more than 155 days. Based on historical data, the capitulation of long-term Bitcoin holders is usually accompanied by the bottom of the market cycle.
The chart below shows the total supply of long-term holders (LTH) losses over the last 11 years. In 2015, 2019 and 2020, BTC price quickly returned to its uptrend when the indicator lost more than his 5 million tokens.
Current supply loss is approaching this threshold. However, it has not yet crossed that, suggesting that the market has not bottomed out yet and that more pain lies ahead for Bitcoin holders.
Profit and loss by return band
Profit and loss indicators by return band show the pain LTH is currently feeling. This metric shows the spending behavior of different market cohorts segmented into bands associated with the magnitude of realized gains/losses.
Data is presented as a percentage of market capitalization. For example, a Y value of +0.5 indicates that the total profit realized is equal to 0.5% multiplied by the total market capitalization at that point in time (X coordinate).
On the other hand, profit or loss is calculated in US dollars by taking the value of the coin and multiplying it by the sale price minus the purchase price. This calculation is aggregated over all coins spent and distributed across the relevant return bands.
The chart below shows LTH deep in the yield zone. However, the current lower band is around -0.07, significantly smaller than the 2015 lower band of -0.12 and his 2019 lower band of -0.14.
Long-term holder net position change
A change in LTH net position refers to either distribution of tokens as LTH cashes out or accumulation as holders take new positions.
The chart below shows that net position change in 2022 has flipped between distribution and accumulation, with a smaller magnitude compared to the previous year. This suggests a high level of uncertainty in the deteriorating macro environment.
Since August, LTH has been accumulating at its highest level this year. This is an encouraging sign in terms of long-term sentiment for Bitcoin.
