March 29, 2024

Glassnode: Bitcoin's fall below $20,000 led to the capitulation of miners and hodlers

Glassnode: Bitcoin's fall below $20,000 led to the capitulation of miners and hodlers

Bitcoin's price drop below $20,000 triggered a new wave of deleveraging and liquidations that affected miners andlong term investors. These are the conclusions made by Glassnode analysts.

The capitulation was the second in a row after the collapse of the Terra ecosystem. The daily volume of realized losses jumped to a record $2.4 billion. Over three days, the cumulative figure amounted to $7.325 billion.

Glassnode: Bitcoin's fall below $20,000 led to the capitulation of miners and hodlers

Glassnode: Bitcoin's fall below $20,000 led to the capitulation of miners and hodlers

Data: Glassnode.

The continuation of the bear market led to a contractionthe profitability of the coins held. In this status, 49% of the issued bitcoins remained, among hodlers - almost two-thirds. In the past, the end of the crypto winter occurred after this figure dropped to 40-45% in the first case and to 49-56% in the second.

Based on the UTXO metric, 26.7% of coins turned out to be “unprofitable”. Previously, the bottom was reached when this value increased to 50-81%.

Glassnode: Bitcoin's fall below $20,000 led to the capitulation of miners and hodlers

Glassnode: Bitcoin's fall below $20,000 led to the capitulation of miners and hodlers

Data: Glassnode.

Based on a logarithmic regression model,which links market capitalization and complexity, analysts have estimated the total unit cost of mining one bitcoin at $17,600. A decrease to this level was observed on June 17.

Transition to the inversion of the “difficulty tape” indicator anda decrease in the Puell Multiple metric confirms the capitulation of miners. The current value of the latter (0.39) indicates a drop in income of this category of market participants by 61% below the annual average. 

At the moment the situation looks worse than inperiod of the "Great Migration" in May-July 2021. The situation of the miners was more dramatic in 2014-2015 and in 2018-2019, when the Puell Multiple dropped to 0.31.

Glassnode: Bitcoin's fall below $20,000 led to the capitulation of miners and hodlers

Glassnode: Bitcoin's fall below $20,000 led to the capitulation of miners and hodlers

Data: Glassnode.

Against the background of the fall in the price of bitcoin, miners reducedtheir positions at a rate of 5,000 BTC to 8,000 BTC per month, which is comparable to the capitulation in the 2018-2019 bear market. After leaving below the ATH of 2017, this category of market participants moved on to the accumulation of coins at a rate of 2200 BTC per month.

Glassnode: Bitcoin's fall below $20,000 led to the capitulation of miners and hodlers

Glassnode: Bitcoin's fall below $20,000 led to the capitulation of miners and hodlers

Data: Glassnode.

Long-term investors also experienced stress. Last week, the number of coins owned by hodlers (for a period of more than a year) decreased at a rate from 20,000 BTC to 36,000 BTC per day.

Glassnode: Bitcoin's fall below $20,000 led to the capitulation of miners and hodlers

Glassnode: Bitcoin's fall below $20,000 led to the capitulation of miners and hodlers

Data: Glassnode.

On June 18, the LTH-SOPR indicator fell to 0.64.In previous bear markets, a reversal occurred when the value fell into the 0.4-0.6 range. In other words, hodlers recorded a loss of 40-60%.

Glassnode: Bitcoin's fall below $20,000 led to the capitulation of miners and hodlers

Glassnode: Bitcoin's fall below $20,000 led to the capitulation of miners and hodlers

Data: Glassnode.

“All categories of market participants are close or have reached pain thresholds. After the past capitulations in the coming weeks-months, the market will monitor the appearance of signs of exhaustion of sellers”,- the experts concluded.

Recall that the well-known supporter of gold, Peter Schiff, doubted that bitcoin would reach the bottom below $20,000.

Earlier, the head of DoubleLine Capital, Jeffrey Gundlach, allowed the price of the first cryptocurrency to fall to the level of $10,000.

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