30% Of Bitcoin Supply Enters Into Loss As Price Continues Decline

Keshav Verma

1 year ago

3 mins read

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On-chain data reveals more than 30% of the Bitcoin supply has entered into losses as the price of the crypto continues to decline.

Less Than 70% Of Bitcoin Entities Are Now In Profit

As per the latest weekly report from Glassnode, the percentage of BTC entities in profit has severely dropped recently as the value now oscillates between 76% and 65%.

The “percent of entities in profit” is an indicator that measures the percentage of Bitcoin investors that are currently in profit.

The metric works by looking at each coin on the chain and checking its history to see the price it last moved at. If this price is less than the current one, then the coin has accumulated some profit. On the other hand, it being bought at a higher price would imply that it’s in loss at the moment.

An “entity” here refers to a collection of addresses that are controlled by the same investor(s). So based on whether the coins held by these entities are in profit or loss, it’s possible to talk about the profit status of the entity as a whole.

Now, here is a chart that shows the trend in the Bitcoin percent of entities in profit over the past three years:

Looks like the indicator's value has sharply dropped recently | Source: The Glassnode Week Onchain - Week 8, 2022

As you can see in the above graph, the Bitcoin percentage of entities in profit has plunged down recently, and is currently below 70%. Conversely, this means that more than 30% of the entities are now in loss.

The report also notes that more than 10% of the entities bought their coins between $33k and $44k. So if the price doesn’t catch an uptrend soon, many of these will start going underwater, and some will thus also be forced to sell their coins.

This can lead to yet more selling pressure in the Bitcoin market, and would therefore be bearish for the crypto’s outcome.

BTC Price

Bitcoin’s price crashed below the $37k mark early today, but has since recovered a bit. At the time of writing, the crypto’s price floats around $37.4k, down 15% in the last seven days. Over the past month, the coin has gained 3% in value.

The below chart shows the trend in the price of BTC over the last five days.

BTC's price seems to have sharply gone down over the last few days | Source: BTCUSD on TradingView

As uncertainties due to geopolitical tensions rise, investors have started exiting out of risk markets. This has resulted in a plunge in the price of Bitcoin.

Featured image from Unsplash.com, charts from TradingView.com, Glassnode.com

Keshav Verma

Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.

Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.

In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.

Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.

Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..

Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.

Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.

As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.

Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.

Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.

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