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  /  cryptocurrency   /  Bitcoin Investors Experience the Worst-Recorded Loss! BTC is Truly Dying

Bitcoin Investors Experience the Worst-Recorded Loss! BTC is Truly Dying

The demise of Bitcoin might be nearer than we think! Investors think twice before investing in BTC

The declination in the Bitcoin price from Thursday to Saturday marked the largest realized loss ever for the top cryptocurrency by market cap, with investors recording US$7.3 billion of locked-in losses. About 555,000 Bitcoin tokens were traded in the US$18,000 to US$23,000 range during the three-day span, with many sellers having originally purchased BTC at much higher prices, according to research firm Glassnode. When an investor buys a capital asset, an increase (or decrease) in the value of the security does not translate to a profit (or loss). The investor can only make a claim for a profit or loss after he has sold the security at fair market value in an arm’s length transaction.

Short-term holders reached a Spent Output Profit Ratio equal to that of the 2018 bear market, meaning their profits are down overall, while some long-term holders experienced “deep capitulation” after buying at Bitcoin’s all-time high of nearly US$69,000 and selling for closer to USa$18,000, as per Glassnode. GlobalBlock cryptocurrency analyst Marcus Sotiriou said Bitcoin may be near a temporary bottoming out point because the cryptocurrency has historically bottomed out when its Percent Supply in Profit (PSP) ranges between 40% to 50%.

“It is important to note when looking at this historical data, that Bitcoin has not gone through a period of persistent inflation,” Sotiriou said in a statement Monday. “We may be edging closer to a generational bottom as more forced liquidations occur, but we cannot be confident of a sustained uptrend until inflation convincingly slows down.” Yuya Hasegawa, an analyst at Japanese cryptocurrency exchange Bitbank, also sees more potential downside given that Bitcoin’s PSP is just above 50%. “Bitcoin’s weekend dip was, to put it simply, not deep enough,” Hasegawa wrote in a report Monday. “Bitcoin still has a downside potential but if its PSP goes below 50%, then the price could finally bottom out.”

Benjamin Cowen, a crypto analyst and CEO of quantitative market analysis platform Into The Cryptoverse, told Decrypt that based on a number of different metrics, “there is still more potential downside” in the current market. Public interest in cryptocurrencies also appears to be on the decline for now, as data pulled from social media analytics site Social Blade shows the top crypto YouTube channels are losing viewers across the world. But regardless of where the retail investor stands on crypto, some analysts believe that on-chain metrics like the NUPL aren’t useful at all in this current climate. “To be honest, I find on-chain metrics pretty useless in the current market, as Bitcoin is clearly tightly connected to the stock market during this fearful market,” Bendik Norheim Schei, head of research at Arcane Research, told Decrypt via email.