According to on-chain data from Glassnode, Bitcoin (BTC) is experiencing its “most severe drop” in 24 months, with short-term holders (STH) suffering unrealized losses.
According to data from Cointelegraph Markets Pro and TradingView, in the recent downtrend, Bitcoin price fell more than 16.5% from its July 1 high of $63,801 to hit a swing low of $63,499 on July 5, which Glassnode describes as “the largest correction since late 2022.”
“Between May and July, the market experienced its deepest cyclical correction, recording a decline of more than -26% from ATH.”
Despite this slowdown, Glassnode’s The Week On-chain report notes that this correction is significantly shallower than previous cycles, pointing to strong market structure and “reduced volatility as Bitcoin matures as an asset class.”
“When evaluating price performance relative to each cycle’s low, the 2023-24 market has behaved eerily similarly to the past two cycles (2018-21 and 2015-17). The reasons why Bitcoin has followed such a similar path are regularly debated, but it continues to provide a valuable framework for analysts to think about cycle structure and duration.”
Glassnode analysts found that the sell-off resulted in 83% of the supply controlled by short-term holders (addresses that held bitcoin for less than 155 days) falling into unrealized losses.
According to the chart below, out of the 3.2 million BTC (184 billion USD) held by STH, 2.9 million BTC (about 166.75 billion USD at current exchange rates) have recently fallen below cost parity due to selling, dropping to $53,000.
According to Glassnode analysts, this has put significant pressure on Bitcoin and the overall cryptocurrency market.
If the BTC price remains below $58,000 in the coming days, the long-term outlook for the Bitcoin price will remain bearish as this level acts as a key resistance level.
At the time of publication, Bitcoin was trading at $57,485 and was facing strong resistance on its recovery path compared to the support it had enjoyed during the downtrend.
The chart below supports this, showing that the 200-day exponential moving average (EMA) at $58,180 has formed the first resistance line for bulls. Another barrier could emerge at the $63,880 level, where both the 50-day and 100-day EMAs appear to be converging.
Aggressive selling in these supplier-concentrated areas can discourage investors from attempting to drive prices higher as they lock in profits or reach break-even.
Popular analyst Daan Crypto Trades observed that reclaiming the 200-day EMM and holding above $59,000 would be a “good start” for Bitcoin bulls.
According to liquidation data from Coinglass, there is strong short-term buying activity near the 200-day EMA of $58,587, highlighting the importance of this level.
This article does not contain any investment advice or recommendations. All investment and trading moves involve risk, and readers should conduct their own research when making decisions.