Bitcoin (BTC) hodlers have capitulated more than at almost any time in Bitcoin history this month.
Data from on-chain analytics firm Glassnode confirms that the November 2022 BTC sell-off was the fourth largest ever.
Bitcoin investors see multi-million dollar losses
In the latest edition of its weekly newsletter, “The Week On-Chain”, Glassnode has analyzed the impact of the FTX debacle on BTC investors.
The results have been mixed, he reveals, with a major loss of confidence, on the one hand, causing the divestment of funds at a loss, while there has also been a “heavy accumulation”.
However, for those getting into BTC under the current conditions, life has been anything but easy.
“A constant event that drives the transition from a bear market to a bull market is the dramatic realization of losses, as investors give up and capitulate at scale,” Glassnode explained.
“November has seen the fourth largest capitulation event on record, setting a 7-day realized loss of -$10.16 billion. This is 4.0 times higher than the December 2018 peak and 2.2 times higher than the March 2020 peak.”
Although the capitulation of the value of the dollar can be explained thanks to the fact that the BTC/USD pair is trading five times higher than at the end of 2018 and 4.5 times higher than in March 2020, it is no secret that cold tempers have characterized crypto markets since FTX imploded.
As Cointelegraph reported, directly after the event, hodlers were sitting on 50% of the BTC supply in an unrealized loss.
Glassnode referenced Bitcoin’s adjusted market value to realized value (MVRV) ratio, which shows that on-chain coins are returning to levels of loss rarely seen before in what it calls a “peak low.” performance”.
Adjusted MVRV is the ratio of BTC’s market value to its realized value, minus the impact of gains from coins that have been inactive for seven years or more.
“This metric is currently returning a value of 0.63 (37% average unrealized loss), which is highly significant as only 1.57% of trading days in bitcoin history have recorded a lower adjusted MVRV value.” , states the bulletin.
“In other words, if we discount retained earnings through presumed lost supply, the current market is the most submerged since the low peak set in December 2018 and January 2015.”
Shop the fall like it’s December 2018
“The Week On-Chain” does, however, contain some good news for market participants.
Despite previous losses, hodlers have been aggressively accumulating BTC ever since – and the trend is encompassing everyone from the smallest “shrimp” to the largest whales.
“From a comparative point of view, the recent strong accumulation score following the recent sale resembles that of late 2018,” Glassnode stated.
He added that similar black swan events in Bitcoin’s past, including recent ones like Terra’s LUNA collapse, prompted similar reactions from investors.
An accompanying chart, the “Accumulation Trend Score” seven-day moving average (MA), showed current conditions in purple, characteristic of massive accumulation. Yellow, on the contrary, signals the massive distribution of BTC in the market.
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