Bitcoin Traders ‘Under Pressure’ After Deepest Correction Since 2022 Erases Profits

83% of short-term Bitcoin traders saw losses after BTC price recorded its deepest drawdown since 2022.

Bitcoin Experiences Deepest Correction

• Bitcoin (BTC) experiences the “deepest correction” in 24 months, impacting short-term holders (STHs) with unrealized losses, according to onchain data from Glassnode.
• Data from Cointelegraph Markets Pro and TradingView reveals that in the latest drawdown, the price of Bitcoin dropped by more than 16.5% from a high of $63,801 on July 1 to set a swing low at $63,499 on July 5.

Despite this downturn, Glassnode’s The Week On-chain report notes that the correction is notably shallower compared to past cycles. It points to a strong market structure and “reduced volatility as Bitcoin matures as an asset class.”

“If we assess price performance relative to each cycle low, the 2023-24 market has behaved eerily similar to the last two cycles (2018-21 and 2015-17). The reason for Bitcoin following such a similar path is a regular topic of debate, but it continues to provide a valuable framework for analysts to think about cycle structure and duration.”

Pressure on Bitcoin Market

• Glassnode analysts found that with the sell-off, 83% of the supply controlled by short-term holders fell into unrealized losses.
• 2.9 million BTC (approximately $166.75 billion) of the 3.2 million BTC ($184 billion) held by short-term holders were pushed below their cost basis with the recent sell-off to $53,000.

According to Glassnode analysts, this placed significant pressure on Bitcoin and the wider crypto market.

Bitcoin Price Outlook

• As long as BTC price remains below $58,000 for the next few days, the long-term outlook for Bitcoin price will remain bearish.
• At the time of publication, Bitcoin was trading at $57,485 and was fighting stiff resistance in its recovery path.

Popular analyst Daan Crypto Trades observed that reclaiming the 200-day EMM and holding above $59,000 would be a “good start” for Bitcoin bulls.

Liquidation data from Coinglass shows high short bids building up near the 200-day EMA at $58,587, asserting the importance of this level.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.