On-chain data shows Bitcoin short-term holders have extended their underwater streak, with BTC continuing to trade under their cost basis.
Bitcoin Short-Term Holders Are Still Holding Net Losses
In a new post on X, on-chain analytics firm Glassnode has talked about the latest trend in the Net Unrealized Profit/Loss (NUPL) for Bitcoin short-term holders. This indicator measures, as its name suggests, the net amount of profit or loss that BTC investors as a whole are carrying.
The metric finds the net profit/loss in USD terms, but as capital stored in the cryptocurrency is following an upward trajectory, the absolute value of profits and losses is also ballooning. To normalize across cycles, the indicator compares the net profit/loss against the asset’s market cap.
When the value of the NUPL is positive, it means the BTC investors as a whole are in a state of net unrealized profit relative to the market cap. On the other hand, the metric’s value being under the zero mark suggests the overall network is underwater. In the context of the current topic, the NUPL of a specific part of the blockchain is of interest: short-term holders (STHs). This cohort includes the BTC investors who purchased their coins within the past 155 days.
Now, here is the chart shared by Glassnode that shows the trend in the Bitcoin STH NUPL over the last several years:
Looks like the value of the metric has been negative in recent weeks | Source: Glassnode on X
As displayed in the above graph, the Bitcoin STH NUPL has been negative recently, indicating that the recent buyers of the asset have been holding a net unrealized loss.
The group first went underwater back in November when the cryptocurrency’s price witnessed its crash. BTC steadied course in December and has seen some recovery in January, but even at the peak of the surge, the STHs couldn’t return to profits.
“A recovery above ~$98K appears to be the minimum threshold required to return this cohort to a net profitable state,” explained the analytics firm. It now remains to be seen whether the unrealized loss streak of the STHs will extend further in the near future or if BTC will reclaim its cost basis.
The NUPL provides information about the profits and losses that Bitcoin investors have yet to capture. Another metric called the Net Realized Profit/Loss covers the profits and losses that BTC holders are “harvesting” through their transactions.
As CryptoQuant head of research, Julio Moreno, has pointed out in an X post, the 30-day value of the Bitcoin Net Realized Profit/Loss has been negative recently, a sign that loss-taking has outweighed profit-taking. This is the first time since October 2023 that loss realization has dominated this timeframe, as the chart below shows.
How the BTC Net Realized Profit/Loss has changed in the last few years | Source: @jjcmoreno on X
BTC Price
At the time of writing, Bitcoin is trading around $90,900, down more than 2% over the past week.
The trend in the price of the coin over the last five days | Source: BTCUSDT on TradingView
Featured image from Dall-E, chart from TradingView.com
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