The price of Bitcoin continues to decline as investors sell their crypto-assets at a lower price. In accordance with Glassnodeblockchain analytics and intelligence service, investors recently exited Bitcoin (BTC) positions at a record high 7.325 billion dollarsrealized loss over 2.4 billion per day for three consecutive days. This record is now the largest realized loss in USD in crypto history. Let’s discuss this loss in detail and see if there is light at the end of the tunnel.
What is a realized loss?
In accordance with Investapedia, a realized loss is a loss that occurs when an asset is sold for less than the original purchase price. This is a metric that shows the total amount of Bitcoin losses incurred by investors on a given day. If losses persist, more crypto investors are likely to sell their assets to reduce losses.
Over the past three days, according to Glassnode statistics, a strong support level for Bitcoin is $18,000, while the resistance level is $23,000. A total of 555,000 BTC changed hands between the two exchanges. According to the data, daily losses during this period were between 1.5 and 2 billion dollars.
Glassnode added that long-term holders also contributed to the block sale, liquidating around 178k BTC for less than $23k. This represents 1.31% of the total supply owned by long-term BTC holders. These are those who hold bitcoins for more than 155 days. Some of this LTC was bought at $69,000, an all-time high for Bitcoin, and then sold at $18,000, a loss of about 75%. This type of liquidation likely helped Bitcoin fall to $18,319 over the weekend. Meanwhile, the market capitalization fell to more than $350 billion, down 73 percent from its all-time peak in November.
Is there light at the end of the tunnel?
With Bitcoin trading below $18,000, Glassnode said the asset’s supply ratio has fallen to 49%. Bear markets have historically bottomed when this ratio has dipped to 40-50 percent, which is likely to indicate that the current downturn has bottomed out. And this is what most traders who seize opportunities bear market to wait The analytical resource highlighted the importance of these levels in the present, adding that investors’ faith in Bitcoin is currently being tested. The decision to buy or sell at this point is crucial. It should also be noted that BTC has already shown some signs of life, recovering almost $3,000 in one day and hovering around $20,000 now.
The constant drop in Bitcoin prices is putting all types of Bitcoin investors to the test. Are they going to continue to believe in this asset or help? To see the light at the end of that tunnel, some experts remind investors why they invested in the first place. One of them is Raul Pal. He is the CEO/co-founder of Real Vision, a financial media company, economist and investment consultant.
This is a long-term trend, he believes. He argues that people holding Bitcoin have a bright future as they have at least another ten years, if not two or more, to see it perform well. Investors should consider withdrawing their investments as retirement money and simply increasing it when they have the money in a weak market. iInvestors should look for times of extreme weakness to buy morenot through leverage, but simply by injecting money into the market.
Other cryptocurrency investors agree with this premise, so they start buying. For this, they use crypto exchanges or brokerage platforms. Some of the best options right now are:
Exchanges will work for beginners, but most experts agree that brokerage platforms are preferable. However, whether it’s a broker or an exchange, the point is that these are the places where you can start investing in cryptocurrency if you want to emulate the traders who buy during bear markets.
In addition, he believes that the conventional crypto strategy of selling high and buying low has flaws. He argues that there simply isn’t enough data to time the market correctly and profit more than those who are long in it. His trading method is to buy, store and replenish money when prices are at their lowest. He was not concerned about the price that was falling in front of him. He just waited and watched because he believes it’s a long-term investment and you don’t usually make money that fast or drop that much.
The light is still bright for BTC
As the value of crypto assets continues to fall, many analysts, including Raoul Pal, believe that the crypto market is nearing a bottom. Although crypto is in full panic mode, according to a former Goldman Sachs executive the market is on the verge of recovery. The President of El Salvador, the country that made Bitcoin legal tender, is another famous figure who seems unfazed by the current state of Bitcoin. He added on Twitter that people should stop looking at the graph and instead enjoy life. If you invest in BTC, your money is safe and will skyrocket in value once the market recovers. Patience is necessary. The Bitcoin Rainbow Chart also shows this The value of Bitcoin increases over time. The rainbow chart aims to be an exciting method of viewing long-term price movements that ignores the daily noise of volatility.
Looking athistorical data, Bitcoin has already experienced many extreme lows. Indeed, the drop we’re seeing now is relatively the biggest since 2012, at a one-year low. However, it is worth noting that it did not fall below the minimum price recorded, indicating that Bitcoin will remain valuable after the daily fluctuation noise is eliminated. This where we go from here will depend on the macro economy. It is better to be attentive to the movement of bitcoins by watching what is happening in the economy, because it also depends on it.
Investors have lost over $7 billion. Is there light at the end of the tunnel?