Research from analytics firm Glassnode highlights the aftermath of the recent Bitcoin “flash crash” that plunged prices to $26,000. The data reveals that a significant majority of Bitcoin holdings held by speculators, around 88%, are now in the red, following the sharp price drop.
Sensitive Speculators vs. Seasoned Hodlers
The analysis presents a clear distinction between two categories of Bitcoin investors: short-term holders (STHs) and long-term holders (LTHs). STHs, who retain Bitcoin for 155 days or less, have been hit hardest by the recent price volatility. Among the approximately 2.56 million BTC held by STHs, only 300,000 BTC (11.7%) remain in profit.
Glassnode notes that STHs’ overall share of the Bitcoin supply is at multi-year lows, and the recent price turmoil has significantly affected their profitability. The breakeven point, or realized price, for STHs has risen to over $28,500. As the research indicates, this cohort has become increasingly sensitive to market movements due to acquiring coins at higher cost bases during the 2023 rally. The analysis underscores that this sensitivity is at its highest point since the March 2023 sell-off.
LTHs Remain Steadfast
In contrast, long-term holders (LTHs) have shown resilience in the face of the recent market downturn. Their volume sent to exchanges has not substantially increased, and their aggregate balance even reached a new all-time high (ATH) during this period. The response of LTHs is consistent with their typical behavior during bear market hangovers.
The Divide in Bitcoin Investor Behavior
Glassnode’s analysis depicts a clear divide between the reactions of short-term speculators and long-term hodlers to the recent market turbulence. While STHs are grappling with significant losses and heightened sensitivity to price movements, LTHs exhibit a steadfast approach, seemingly unaffected by the recent price drop.
Glassnode’s research sheds light on the divergent responses of Bitcoin speculators and seasoned hodlers to the recent flash crash, highlighting the varying degrees of resilience and sensitivity within these investor categories.*