With three weeks to go since the FTX collapse, Bitcoin (BTC) analysts are reviewing the data to decipher if the selling will continue or if a bear market floor has been reached.
One thing miners and short and long term holders have in common is that they are losing in the Bitcoin market right now.
According to Glassnode’s on-chain analysis, the scale of realized and unrealized losses among Bitcoin holders is one of the strongest capitulation events in BTC history. Capitulation is making it difficult for all groups with the increasing number of bankruptcies and declining income for miners.
Bitcoin Realized Losses Fourth Highest Ever, Unrealized Losses Rising
$10.8 billion in 7-day realized losses were recorded for Bitcoin in November. The largest recorded realized loss in Bitcoin history is that of June 2022, when $19.8 billion was recorded. These losses show that a large volume of Bitcoin has changed hands at discounted prices.
A popular crypto investing saying is “you can’t lose if you don’t sell”. LUnrealized losses track the entire Bitcoin market against total market capitalization. November 2022 unrealized loss of 56% is the largest in the current bear market. In 2014-2015, unrealized losses reached an all-time high for Bitcoin holders at 86%. The current unrealized losses are the fourth largest in Bitcoin history.
According to Glassnode analysts:
“This metric has recently reached a high of 56%, which is the highest for this cycle, and comparable to previous bear market bottoms.”
Block times slow as Bitcoin miners struggle
Bitcoin investors are not the only group capitulating in the current market. Bitcoin miners are struggling to remain profitable with falling prices.
There it is. Hash Ribbon miner capitulation confirmed. Triggered by the $10B FTX fraud and subsequent collapse, Bitcoin miners are now going bust and Hash Rate is trending down. pic.twitter.com/TorX7PzrNu
—Charles Edwards (@caprioleio) November 28, 2022
There is. The capitulation of the Hash Ribbon miner is confirmed. Triggered by the $10 billion FTX fraud and subsequent crash, Bitcoin miners are now bankrupt and the hash rate is trending downward.
Since Bitcoin miners are under pressure to remain financially viable, this affects the BTC mining hash rate. A reduction in the Bitcoin hash rate slows down BTC transactions. According to HashRate Index, block times exceeded 11 minutes.
Bitcoin’s hashrate is dropping like a rock↘️
Bitcoin’s 7-day average hashrate is currently 236 EH/s, a 14% decrease from its 274 EH/s ATH
Block times are sluggish as a result: 11 minutes and 12 seconds on average this epochhttps://t.co/JN7OmpJ8X0 pic.twitter.com/ckxqEqOGqX
— Hashrate Index (@hashrateindex) November 28, 2022
Bitcoin hashrate is dropping like a rock↘️
Bitcoin’s 7-day average hashrate is currently 236 EH/s, a 14% decrease from its all-time high of 274 EH/s
As a result, block times are slow: 11 minutes and 12 seconds on average in this epoch.
Despite the current challenges, analysts believe capitulation is healthy to start the next bull run. glassnode says:
“A constant event that motivates the transition from a bear market to a bull market is the dramatic realization of losses, as investors give up and capitulate on a large scale.”
With so many groups currently losing losses at this stage of the post-FTX crash bear market, Bitcoin and general market sentiment will need to improve to stimulate new money to fuel a bull run. Without improved sentiment, the capitulation may not match previous Bitcoin cycles.
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