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Breaking News: Coinbase Confirms DOJ Investigation Following Major Security Incident

82% Of Bitcoin Short-Term Holder Supply Now In Loss, Capitulation Ahead?

Keshav Verma
Keshav Verma
3 years ago
3 mins read

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On-chain data shows around 82% of the Bitcoin short-term holder supply is currently in loss, suggesting that capitulation may occur soon.

82% Of Bitcoin Short-Term Holder Supply Now In Loss, While Total STH Supply Declines

According to the latest weekly report from Glassnode, the BTC STH supply is nearing all-time lows at the moment. However, 82% of it is being held at a loss.

The “BTC short-term holder supply” is that part of the total Bitcoin supply that has been held for less than 155 days.

The investors holding this supply are usually the likeliest to sell their coins off during market volatility, and especially when a capitulation flush out occurs.

An on-chain indicator, the Bitcoin STH supply in profit/loss, tells us the percentage distribution between these coins being held at a profit and those being held at a loss.

When a high amount of this supply is in loss, there may be more sell-side pressure in the market as short-term holders capitulate easily.

Related Reading | Bitcoin MPI Rises To Highest Value Since March 2021, Bull Rally Soon?

Now, here is a chart that shows the trend in the BTC STH supply over the history of the coin:

Bitcoin Short-Term Holder Supply In Profit/Loss

Looks like the value of the indicator has declined over the years | Source: Glassnode's The Week Onchain - Week 11, 2022

As you can see in the above graph, the Bitcoin STH supply has been observing a constant downtrend over much of the history of the coin, and is currently near all-time low values. The decrease in this supply happens when some of the coins mature beyond the 155-day cutoff, thus becoming part of the “long-term holder supply” instead.

Since short-term holders can be a big source of sell-side pressure, the number of coins held by them severely going down can be bullish for the price of the crypto.

Related Reading | Bitcoin Hashrate Swells 15% Since Last Week As Analysts Expect Mining Difficulty To Increase

However, while the supply is low right now, around 82% of it is currently in loss. So despite the decline in total supply, these coins in loss still amount to around 2.5 million BTC, and thus they can add quite significant sell pressure to the market.

As macro uncertainties like the Russian invasion of Ukraine continue to loom over the Bitcoin market, these short-term holders may finally break and capitulate in case their coins remain in the red or go even deeper.

BTC Price

At the time of writing, Bitcoin’s price floats around $38.5k, down 1% in the last seven days. Over the past month, the crypto has lost 10% in value.

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

Bitcoin Price Chart

BTC's price seems to have been in consolidation for a few days now | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, Glassnode.com
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Keshav Verma
Keshav Verma

Keshav Verma

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

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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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Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality
Created by industry experts and meticulously reviewed
The highest standards in reporting and publishing
How Our News is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

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