‘Bull or bear market?’ Bitcoin losses from panic selling mount in 2022

Bitcoin (BTC) sellers are losing more money as BTC price declines indicate that some investors are panicking at current prices.

In January, more and more BTC entities are selling coins for less than they bought, according to data from on-chain analytics firm Glassnode and trading suite Decentrader.

Loss on the chain currently on sale “consistently”

No one wants to sell an asset without profit, but the downtrend in Bitcoin tends to see a particular cohort of market participants do so anyway.

This panic selling is often ridiculed by long-term investors. Long-term investors claim that stronger, more fluid players scoop up supply and hurt the seller.

Analysis of Spent Profit Output Ratio (SOPR) Metrics, Decentrader Analyst Philip Swift clearly Overall sales remain relatively low, but this year there was a panic.

SOPR (Spent Output Profit Ratio) recently has a consistent patch of loss sales on the chain, he summarized to Twitter followers this week.

SOPR takes aggregated data of BTC’s “buy and sell prices” over a specific time period to create an overall impression of whether the seller is making a profit or losing money.

As creator Renato Shirahashi points out, the psychology of selling lost is likely to be the case only for panicked people, which in turn could be reassuring because of the low sales this month.

“It’s interesting to note that the loss sales in the last few months have been much shallower than in the bear market in 2018/19, but much deeper than we’ve seen in either Bull Run period,” Swift added. ..

“Is this a bull market or a bear market?”

Bitcoin Used Profit Output Ratio (SOPR) Chart (Screenshot). Source: Decentrader

As Cointelegraph reported, Bitcoin pricing activity has been amazed at the 50% retracement since November. This is not a feature of what should be the most bullish part of a half cycle.

When zoomed out, the whole 2021 definitely looks like an integrated zone after a rapid increase a year ago.

Big players dominate transactions

On the other hand, if the sale is from a small amount of individual investors, this will chime with other data covering on-chain transactions.

Related: Derivative data suggests that Bitcoin’s $39K bounce was just a blip

As a Glassnode Verified This week, the majority of transactions now involve large sums of over $1 million. The company concludes that this refers to institutions rather than retail as the driving force on the chain.

“Bitcoin transfers continue to be dominated by institutional flows, and more than 65% of all transactions are worth over $1 million,” the tweet reads.

“The upward trend in institutional advantage in on-chain volume began around October 2020, when prices ranged from about $10,000 to $11,000.”

Bitcoin forwarding breakdown Annotated chart. Source: Glassnode / Twitter

2022 was announced as the year in which the institution will actually return to Bitcoin Space.

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