Whale investors of the Bitcoin market have witnessed significant losses in the last few weeks as BTC hit a low in a realized loss since inception.
The collapse of the popular crypto exchange FTX has weakened the global crypto market by wiping billions of dollars from investors’ portfolios. The Bitcoin market seems to be the most affected as the BTC mining industry’s profitability has been slumped hard to the bottom levels. As a result, Bitcoin took its heaviest hit this month in 12 months, dropping to a low of $15,500 and struggling to break through the sturdy resistance at $16,000. Moreover, the Bitcoin market has witnessed severe losses amid the downfall as its net realized hits the fourth lowest level since inception.
Bitcoin Investors Are Largely Impacted During The Downtrend
Over the last few weeks, Bitcoin price witnessed significant volatility in the price chart as it dropped to its yearly lows due to the high selling pressure caused by whale investors amid growing concerns about centralized crypto exchanges. As a result, investors and miners were forced to close their investments and liquidate all their holdings to avoid any upcoming bearish threat from the BTC price chart.
According to on-chain data provider, Glassnode, Bitcoin’s net realized loss had hit a low, which is the fourth significant loss in Bitcoin’s history. The firm noted that BTC’s net realized loss reached $1.9 billion last Friday amid the ongoing bearish bloodbath of Bitcoin due to the FTX’s downfall. The firm further highlighted that this is the fourth lowest loss after the crypto king made $2.0 billion in losses during the LUNA collapse, a $2.2 billion loss in June 2021, and a $2.5 billion loss in June 2022 during the start of a prolonged bearish trend.
The “net realized profit/loss” is an indicator that measures the net amount of profits or losses being carried out by all investors in the Bitcoin market. The metric works by analyzing the on-chain history of each coin being sold to its purchase price. If the selling price of any coin is greater than the purchase price, then that particular coin has just been sold at a profit.
On the other hand, if the selling price is lower than BTC’s purchasing price, then the coin sees a realization with some amount of loss. When the net realized profit/loss trades greater than zero, it means the overall market is selling at a net profit right. While if it has a negative value, it implies holders are realizing assets with some loss at the moment.
The Future Of Bitcoin Becomes Hazy
However, some analysts predict that the BTC price needs to reach its final capitulation zone in net losses before making a bullish reversal. According to the on-chain analytic firm, Whalemap, BTC needs more losses to reach the final bottom before making a clear uptrend. The firm mentioned that BTC needs to lose nearly $629 million to $1.029 billion to reach near the level of $14K, which might trigger a smooth bull run for Bitcoin in 2023.
Moreover, Glassnode said, “Against a backdrop of extremely challenging macroeconomic and geopolitical turmoil, bitcoin is reaching peak investor saturation by high conviction HODLers, and it is becoming quite plausible that a genuine bottom formation could be underway.”
Hence, a more downtrend is anticipated in the BTC price chart to follow its previous bearish cycles. If BTC follows its 2018’s bearish trend, it can skyrocket soon to new highs after taking support at $14K
