Bitcoin Realized Losses Surge Post-FTX Collapse: Glassnode Reports
- Bitcoin BTC +0.15% sees largest realized loss spike since FTX collapse.
- Losses driven by short-term holders selling at a loss.
- Market fragility heightened by weak spot demand and negative ETF flows.
Bitcoin’s recent price decline, reported by Glassnode, has led to the largest spike in realized losses since late 2022, primarily affecting short-term holders globally.
This significant loss spike underscores Bitcoin’s fragile market condition, highlighting increased vulnerability amid weak institutional demand and diminishing liquidity, impacting investor confidence worldwide.
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Glassnode, an on-chain analytics firm, reports that the 7-day EMA of short-term holder realized losses has surged to $523M per day, marking the highest point since the FTX incident. This reflects a dramatic market shift.
“Overall loss dominance among short-term holders has collapsed their profit-loss ratio to 0.07x, indicating overwhelming losses.” Glassnode Week-On-Chain Report
The immediate effect is a substantial strain on market liquidity, as short-term holders dominate realized losses. This can potentially destabilize the market if sustained over time.
The fragile market situation is compounded by negative ETF flows and lackluster spot demand. These factors indicate a reluctance among institutional investors to engage, potentially influencing broader market trends.
The situation resonates with the early 2022 market, marked by thin liquidity and elevated losses. Analysts suggest the current state resembles previous bear phase vulnerabilities.
Insights point to potential outcomes such as deeper market corrections if conditions persist. Historical trends show similar scenarios leading to volatility spikes, underscoring the need for cautious investor approaches.
