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Bitcoin Losses Shift to Older Cohorts, Indicating Broadening Capitulation
Recent data suggests a significant shift in the composition of Bitcoin losses, indicating a broadening capitulation. As of April 7, the total realized losses dropped to a low of $34.4 million, with a notable change in the breakdown of these losses.
According to the data, short-term holders (holding for 1 week to 1 month) still accounted for 23.8% of total realized losses at $8.2 million, while mid-term holders (holding for 1 month to 1 year) made up 18.9% with a loss of $6.5 million. More alarmingly, the 3m-6m cohort – which typically includes investors who purchased Bitcoin last fall – now accounts for an increased 19.4% of total realized losses at $6.7 million.
This development signals a widening of capitulation beyond just short-term holders, suggesting that even more investors are feeling pressure and forced to sell their Bitcoin at a loss. The fact that long-term holders are now taking significant losses is particularly concerning, as it indicates a broader impact of the market correction on the cryptocurrency’s investor base.
In light of this information, we can assume that the pain is no longer limited solely to new investors or those who entered the market during recent price increases. Instead, the losses are now spreading to older coins – especially in the 3m-6m group, which has seen its share in loss realization jump from a mere 0.8% on February 27th to a substantial 19.4%. This widening of capitulation often precedes a market bottom.
As noted earlier, this data is quite similar to signals we have seen at the end of significant market corrections. In short, if you’re considering buying Bitcoin now, be prepared for the possibility that things could get worse before they get better. If the present sell-off continues and worsens in the broader market, there’s a considerable downside risk for any buying done at this point.
The future price performance of Bitcoin will ultimately depend on various factors, including market conditions and investor sentiment.
Source: https://nulltx.com/bitcoin-losses-shift-to-older-cohorts-indicating-broadening-capitulation/
