According to a recent study by Glassnode, bitcoin is down roughly 55% from its November high, with approximately 40% of digital currency holders now underwater on existing investments. The percentage of submerged investments rises even more if considered the short-term investors who bought bitcoin when it was USD 69,000.
In the last month, 15.5% of all bitcoin accounts have incurred an unexpected loss as the world's most demanding cryptocurrency plummeted to USD 31,000, matching the decline in tech stocks. Analysts have claimed that bitcoin’s close ties with Nasdaq challenge the argument that cryptocurrency works as an inflation hedge.
Notably, there has been a surge in "urgent transactions" during the recent sell-off, in which investors pay substantially higher costs, suggesting that they were willing to pay a premium to shorten transaction timelines. The overall sum of all on-chain fee income paid reached 3.07 bitcoin in the last week, the biggest sum ever documented in its database.
As a result of recent market instability, the on-chain transaction fees associated with exchange deposits also suggested urgency, the study claimed, meaning that bitcoin investors were eager to de-risk, sell, or add protection to their margin holdings.
During the sell-off this week, over USD 3.15 billion in value has flowed into or out of exchanges, the largest since the market reached its all-time high in November. Wallets holding more than 10,000 bitcoins have been a particularly powerful distributing factor in recent weeks.
While individual investors are more confident, those holding less than one bitcoin are the strongest generators, according to data, and revenue regeneration among these smaller-scale holdings is much lower than it was in February and March.
Experts are calling for approximately USD 29,000 a coin and suggest that those buying for one- to three-month should add protection for the long run.