Recent data indicates that a significant number of Bitcoin addresses are currently facing losses due to the purchase of *BTC* at higher prices than its current market value. According to insights from IntoTheBlock, approximately 848.39K addresses acquired around 481.71K Bitcoin, valued at $25 billion, at an average price of $52,125. This situation has led to potential selling pressure as investors may look to sell their holdings once their positions reach a breakeven point.
The introduction of U.S.-based spot Bitcoin Exchange-Traded Funds (ETFs) in January has had a noticeable effect on market liquidity. The ETFs were anticipated to influence the order book liquidity, which denotes the ability to execute trades at stable prices. A month following the commencement of trading for about twelve ETFs, the repercussions on liquidity have become increasingly evident.
The total volume of buy and sell orders within 2% of the market price for Bitcoin across 33 centralized exchanges surged to $539 million early Tuesday. This figure, as recorded by Paris-based Kaiko, represents the highest level since October and marks an approximate 30% increase since the spot ETFs were introduced on January 11.
Investor Sentiment
The increase in market depth, as indicated by the rise in buy and sell orders, suggests a growing investor interest and potentially more stable prices in the near term. However, the current losses faced by a large number of Bitcoin holders may lead to increased volatility as these investors might sell off their positions to break even, impacting the market further.
As the cryptocurrency market continues to navigate through these changes, the role of ETFs and their impact on liquidity and market depth will be critical factors to watch. Investors and market analysts alike will be closely monitoring how these dynamics influence Bitcoin’s price and overall market stability.
