Bitcoin Investors Lose Record $7.3 Billion in Three Days

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The Bitcoin selloff from Thursday to Saturday marked the largest realized loss ever for the top cryptocurrency by market cap, with investors recording $7.3 billion of locked-in losses.

About 555,000 Bitcoin were traded in the $18,000 to $23,000 range during the three-day span, with many sellers having originally purchased BTC at much higher prices, according to research firm Glassnode.

Short-term holders reached a Spent Output Profit Ratio equal to that of the 2018 bear market, meaning their profits are down overall, while some long-term holders experienced “deep capitulation” after buying at Bitcoin’s all-time high of nearly $69,000 and selling for closer to $18,000, per Glassnode.

The last three consecutive days have been the largest USD denominated Realized Loss in #Bitcoin history.

Over $7.325B in $BTC losses have been locked in by investors spending coins that were accumulated at higher prices.

A thread exploring this in more detail 🧵1/9 pic.twitter.com/O7DjSK2rEQ

— glassnode (@glassnode) June 19, 2022

“Almost all wallet cohorts, from Shrimp to Whales, now hold massive unrealized losses, worse than March 2020. The least profitable wallet cohort hold 1-100 BTC,” Glassnode reported.

GlobalBlock cryptocurrency analyst Marcus Sotiriou said Bitcoin may be near a temporary bottoming out point because the cryptocurrency has historically bottomed out when its Percent Supply in Profit (PSP) is 40% to 50%.

Finally, we can see that as prices hit the $17.7k lows yesterday, just 49% of the $BTC supply was in profit.

Historical bear markets have bottomed and consolidated with between 40% and 50% of supply in profit.#Bitcoin investor conviction is seriously being put to the test

9/9 pic.twitter.com/qRQRrxWkng

— glassnode (@glassnode) June 19, 2022

“It is important to note when looking at this historical data, that Bitcoin has not gone through a period of persistent inflation,” Sotiriou said in a statement Monday. “We may be edging closer to a generational bottom as more forced liquidations occur, but we can not be confident of a sustained uptrend until inflation convincingly slows down.”

Yuya Hasegawa, an analyst at Japanese cryptocurrency exchange Bitbank, also sees more potential downside given that Bitcoin’s PSP is just above 50%.

“Bitcoin’s weekend dip was, to put it simply, not deep enough,” Hasegawa wrote in a report Monday. “Bitcoin still has a downside potential but if its PSP goes below 50%, then the price could finally bottom out.”