AUS
NZ
UK
CA
USA
FRA
GER
ESP
ITA
NLD
PRT
SWE
GRC
IND
POL
BRA
ZAF
RUS
CHN
UAE
On August 5, Bitcoin experienced a sharp decline of more than 15%, reaching a six-month low of $49,050. According to analysts at Glassnode, this drop may have been an overreaction by those holding Bitcoin for shorter periods.
As of August 20, with [Bitcoin] priced around $58,800, short-term holders—those who have owned Bitcoin for less than 155 days—are now in a position of unrealized losses. This group primarily includes individuals who acquired Bitcoin during the 2024 rally when it peaked at an all-time high of $73,835 on March 14.
Glassnode's August 20 report highlights that short-term holders have absorbed the bulk of the losses during the recent downturn. The market value to realized value (MVRV) ratio for these holders has fallen below the equilibrium value of 1.0 in recent weeks, indicating that they have faced the most significant impact from the recent market correction.
While such dynamics are common during bull markets, the report cautions that prolonged periods of STH-MVRV remaining below 1.0 could incite panic among holders and potentially trigger a more severe bearish trend.
Glassnode's analysis revealed only a minor deviation between the spent short-term holder cost basis and the holding cost basis during the current correction cycle. This suggests that the recent market sell-off below $50,000 may have been a modest overreaction.
As long as Bitcoin remains below $59,000 and continues to struggle with the 200-day exponential moving average (EMA), short-term holders will likely continue to face losses. On August 20, Bitcoin's price briefly crossed the 200-day EMA but retraced to around $58,700.
This difficulty in maintaining above the 200-day EMA may be attributed to factors such as ongoing outflows from Bitcoin exchange-traded funds, declining miner profitability, and concerns about potential negative macroeconomic developments. The release of the United States weekly jobless claims data and the flash Purchasing Managers’ Index (PMI) for August on August 23 could influence Bitcoin's price movement, potentially aiding in its effort to reclaim the 200-day EMA.
