Data from Glassnode shows that Bitcoin holders have realized 14 times more losses than gains over the past few weeks.
Bitcoin 7-day MA Realized P/L ratio sets new all-time low
According to Glassnode’s latest weekly report, the realized profit/loss ratio has hit its lowest ever reading.
Whenever a coin sits idle on the chain and the price of Bitcoin changes, it accumulates some profit or loss depending on the direction of the price fluctuation.
This profit or loss is said to be “unrealized” as long as the coin still remains in the same wallet, but once the holder moves/sells that coin, the total amount of profit/loss he carried is “recognized.”
The Realized Profit and Realized Loss metrics track such profit and loss amounts reaped by investors across the BTC market.
Now, the “Realized Profit/Loss Ratio” is an indicator that measures the ratio between the current values of these two metrics.
Here is a chart showing the trend of the 7-day moving average of this Bitcoin ratio over the history of the crypto:
The 7-day MA of the metric seems to have been quite low for the past few days | Source: The Week Onchain by Glassnode – Week 49, 2022
As you can see in the chart above, the profit/loss ratio realized by Bitcoin fell deep below a value of 1 after the FTX crash.
If the indicator shows values in this range (i.e. if it is less than 1), it means that BTC investors are currently realizing a higher loss than profit.
In the recent slump, the metric not only fell to fairly low levels, but actually posted a new all-time low. This lowest level corresponded to a 14 times higher loss realization than profit realization.
The chart shows that in previous bear markets, historically low lows like now have been observed at or near lows, meaning they have always been at the center of shifts in macro market regimes.
If the same trend follows this time, then the current bitcoin market could also be in the middle of such a shift.
BTC price
At the time of writing, the price of Bitcoin is hovering around $16.9k, up 3% over the past week. Over the past month, the crypto has lost 20% in value.
The chart below shows the evolution of the coin’s price over the last five days.
It looks like the value of the crypto has been trading sideways around $17,000 | Source: BTCUSD on TradingView Featured image from 愚木混株 cdd20 on Unsplash.com, Charts by TradingView.com, Glassnode.com
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