The cryptocurrency market, for what seems like forever, has been in a bear market, with prices constantly hitting new lows. Even Bitcoin [BTC]which controls the majority of the cryptocurrency market, has been hit, with it looking like long-term BTC holders are the hardest hit.
Here is AMBCrypto Price prediction for Bitcoin (BTC) for 2022-23
According to statistics from the data intelligence platform Glassnode Short-term holders of BTC have fared better than long-term holders. Glassnode has also I observe an increase in network difficulty, which has made mining BTC more difficult.
The chain cost basis for #bitcoin The short-term holders have now crossed below the long-term holders.
This means that buyers of $BTC in the last 5 months they have a higher cost base than those that HODL endured all the volatility of the 2020-22 cycle. https://t.co/xEXy44cTj3 pic.twitter.com/FZOfWvwOKn
– glass node (@glassnode) October 10, 2022
It is a road to the south.
The price of BTC witnessed a steady decline, as the chart demonstrates. Price range analysis revealed a nearly 60% decline in asset value between April and September 2022. After peaking in the $45,000 to $48,000 range in April, it fell to the $18,000 to $18,000 range. $19,000 where it was at the time of publication.
With a current mark of -40.47% on the 365-day market value to realized value (MVRV) indicator, it was clear that long-term BTC holders were unprofitable as of Oct. 11. This score also implied that investors who decided to withdraw cash at that time would have lost more than 40%.
There was a significant discrepancy between the 30-day MVRV and the 365-day MVRV representation of holders’ returns. In contrast, the MVRV of the last 30 days was -1.05%, indicating a smaller drop. Investors who decided to sell at the current stage of MVRV would bear a loss of less than 2%.
Bitcoin is raising temperatures
The recent bear market has not been kind to Bitcoin miners either. The difficulty of the mining network was reported to have increased along with the hashrate. According to data From Blockchain.com, the current overall hash rate was 257.225 million, the most in over a year.
Also, network difficulty it has been increasing since September and appears to have reached a new peak recently at 33,739 t. Even though both network difficulty and hashrate were increasing, miners income seemed to go in the opposite direction.
It seemed like miner income was on the side of late, but in reality, it had been steadily declining over the months. Actual revenue was $20.4 million, well below the approximately $50 million expected at the beginning of the year.
What these two entities, miners and hodlers, have in common is settlement risk. Faced with a persistent decline, some long-term investors may decide to sell their holdings to minimize losses. Additionally, short-term traders can also sell to limit their losses should the market continue to drop.