Bitcoin speculators have been hit hard following a sharp downturn in BTC prices, resulting in significant unrealized losses. According to the latest research from crypto analytics firm Glassnode, the recent market turbulence has “purged” speculators, with liquidations reaching a staggering $365 million.
Short-Term Holders Suffer Most
The data reveals that Bitcoin short-term holders (STHs)—those who have held BTC for 155 days or less—are bearing the brunt of the losses. This cohort, typically more vulnerable to market shocks than long-term holders (LTHs), saw their holdings plunge into the red following the price crash. Glassnode’s analysis highlights that only 7% of STH holdings remain in profit, echoing the stress levels experienced during the BTC price dip below $30,000 a year ago.
Bitcoin STH % supply in profit with standard deviation bands (screenshot). Source: Glassnode
The STH spent output profit ratio (SOPR) metric, which measures the profitability of coins being spent, recorded historically low levels, indicating that recent investors are locking in losses averaging -10%. Glassnode noted that these depths have only been surpassed on 70 occasions in Bitcoin’s history.
Market Panic and Liquidations
The broader market reaction to the price drop has been characterized by panic and fear, with STHs “dominating” on-chain losses—just 3% of the losses were attributable to LTHs. The massive sell-off by STHs has led to what Glassnode describes as a “statistically significant capitulation,” drawing parallels to the market conditions following the FTX collapse.
Bitcoin STH SOPR chart (screenshot). Source: Glassnode
CryptoQuant, another on-chain analytics platform, suggested that the current situation might present a potential buying opportunity. Historically, SOPR levels around 0.90 to 0.95 have marked good entry points during bull trends.
Looking Ahead
August has been an “exceptionally eventful month” for Bitcoin, according to Glassnode. The cryptocurrency recorded its largest drawdown of the current cycle, a -32% drop from its all-time high, triggering a wave of liquidations and a meaningful reduction in market leverage.
Bitcoin futures liquidations (screenshot). Source: Glassnode
As the dust settles, analysts will be closely watching on-chain and spot market data to assess Bitcoin’s potential recovery in the coming weeks.
