Monday, November 28, 2022
 

Data Shows Long-term BTC Holders Spend Their Coins at 44% Loss

  • BTC’s MVRV ratio has dropped below the region “one”, indicating that the average BTC holder is at a loss.
  • The MVRV ratio is calculated by dividing Bitcoin’s market cap by its realized cap.
  • Long-term bitcoin holders spend their coins at a 44% loss, with the total supply in profit falling sharply in the previous week.

CryptoQuant, an on-chain data analytics portal, has published a post stating that the Bitcoin (BTC)’s market value to realized value (MVRV) ratio has dropped below the region “one” once more, indicating that the average BTC holder is at a loss.

The MVRV ratio is calculated by dividing Bitcoin’s market cap by its realized cap. Unlike the market cap, the realized cap estimates the cap of BTC by considering each coin in circulation with its most recent price.

As metrics below the cutoff indicate that the market is now losing money since the realized cap is greater than the market cap, analysts believe less motivation exists for investors to sell when the value declines.

Bitcoin MVRV Ratio
Source: CryptoQuant

As seen in the graph, the Bitcoin MVRV ratio had previously managed to escape above the value=1 line, but after very briefly doing so, the measure has now fallen back into the danger zone. CryptoQuant further asserted that the MVRV ratio below point 1 indicates that Bitcoin holders experienced a 1% loss at the current bitcoin price, as shown by the NUPL metric line in blue.

Long-term bitcoin holders spend their coins at a 44% loss, it added, with the total supply in profit falling sharply in the previous week. An excerpt from the research read:

Overall, it’s a favorable accumulation zone for a dollar cost averaging. However, is this a bottom? Unfortunately, a price bottom is still far from being entirely formed as these valuation metrics are still considerably below their 1-year MA.

At the time of writing, BTC trade at $20,252, falling by 5.56% in the last 24 hours.

  • BTC’s MVRV ratio has dropped below the region “one”, indicating that the average BTC holder is at a loss.
  • The MVRV ratio is calculated by dividing Bitcoin’s market cap by its realized cap.
  • Long-term bitcoin holders spend their coins at a 44% loss, with the total supply in profit falling sharply in the previous week.

CryptoQuant, an on-chain data analytics portal, has published a post stating that the Bitcoin (BTC)’s market value to realized value (MVRV) ratio has dropped below the region “one” once more, indicating that the average BTC holder is at a loss.

The MVRV ratio is calculated by dividing Bitcoin’s market cap by its realized cap. Unlike the market cap, the realized cap estimates the cap of BTC by considering each coin in circulation with its most recent price.

As metrics below the cutoff indicate that the market is now losing money since the realized cap is greater than the market cap, analysts believe less motivation exists for investors to sell when the value declines.

Bitcoin MVRV Ratio
Source: CryptoQuant

As seen in the graph, the Bitcoin MVRV ratio had previously managed to escape above the value=1 line, but after very briefly doing so, the measure has now fallen back into the danger zone. CryptoQuant further asserted that the MVRV ratio below point 1 indicates that Bitcoin holders experienced a 1% loss at the current bitcoin price, as shown by the NUPL metric line in blue.

Long-term bitcoin holders spend their coins at a 44% loss, it added, with the total supply in profit falling sharply in the previous week. An excerpt from the research read:

Overall, it’s a favorable accumulation zone for a dollar cost averaging. However, is this a bottom? Unfortunately, a price bottom is still far from being entirely formed as these valuation metrics are still considerably below their 1-year MA.

At the time of writing, BTC trade at $20,252, falling by 5.56% in the last 24 hours.

 

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