The market for Bitcoin (BTC) has experienced significant volatility over the past week, heavily influenced by bearish trends. During this timeframe, Bitcoin plummeted by more than 15%, reaching a low of $80,000. Notably, blockchain analytics company Glassnode has conducted a thorough analysis of investor behavior during this price drop, particularly focusing on the group with the largest realized losses.
BTC 1-Day To 1-Week Holders Drive Market Liquidation Pressure
On Friday, February 28, Bitcoin fell below $80,000, marking a price point not seen since November 2024. In reaction, the BTC market recorded $685 million in realized losses, adding to the initial $2.16 billion from February 25-27. In a recent post on X, analysts from Glassnode examined the market’s sell-off on Friday, revealing that this latest capitulation is mainly occurring among short-term holders (STH), who are realizing losses at a much higher rate compared to long-term holders.
According to Glassnode’s findings, the most impacted group of STH includes new market participants from the past week, as shown by the following data: 1-day to 1-week holders faced losses of $238.8 million, 1-week to 1-month holders $187.6 million, 1-month to 3-month holders $132.4 million, and 24-hour buyers $104.9 million. However, it is important to note that holders from the past 3-6 months also saw a marked increase in realized losses, with this group recording $12.7 million in losses on Friday, which represents a 95.4% jump from the previous day.
Additionally, Glassnode’s report indicated that the price drop on Friday elevated the average realization rate of Bitcoin losses to $57.1 million per hour. The loss realization speed per cohort of STH, who comprise the majority of market losses, is as follows: 1-day to 1-week holders at $19.9 million/hour, 1-week to 1-month holders at $13.9 million/hour, 1-month to 3-month holders at $14.2 million/hour, and 24-hour buyers at $8.04 million/hour.
As anticipated, the 1-day to 1-week group is the primary force exerting liquidity pressure, with a loss realization rate nearly double that of the next largest category.
Bitcoin Long-Term Holders Remain Steadfast
Further data from Glassnode’s report shows that long-term Bitcoin holders from the past 6-12 months have exhibited minimal to negligible loss realization despite the broader market capitulation.
This trend suggests that long-term investors remain largely unaffected by the recent sell-off and price corrections, holding a strong belief in a market recovery. As of press time, Bitcoin is trading at $85,200 following some price recovery on Friday. However, it still reflects a weekly loss of 11.34%, highlighting the current bearish momentum in the market.
Featured image from Getty Images, chart from Tradingview
