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

The fall in the price of bitcoin below $20,000 triggered a new wave of deleveraging and liquidations that affected miners and long-term investors. These are the conclusions made by Glassnode analysts.

The past capitulation was the second in a row after the collapse of the Terra ecosystem. Daily realized losses jumped to a record $2.4 billion for a three-day cumulative figure of $7.325 billion.

Data: Glassnode.

The continuation of the bear market has led to a reduction in the 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 metric UTXO, “unprofitable” were 26.7% of the coins. Previously, the bottom was reached when this value increased to 50-81%.

Data: Glassnode.

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

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

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At the moment, the situation looks worse than during 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.

Data: Glassnode.

As the price of bitcoin fell, miners reduced their positions at a rate of 5,000 BTC to 8,000 BTC per month, which is comparable to capitulation in the bear market of 2018-2019. After leaving below ATH In 2017, this category of market participants switched to the accumulation of coins at a rate of 2200 BTC per month.

Data: Glassnode.

The stress was also experienced by long-term investors. 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.

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 corridor. In other words, hodlers recorded a loss of 40-60%.

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”, 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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