Bitcoin’s price performance over the past two weeks has been a major source of concern, as the coin’s value continues to move away (about 15% now) from its all-time high. As the flagship cryptocurrency slows, the latest on-chain data suggests a group of investors are exiting the market en masse.
More short-term holders are giving up their holdings
In an October 18 post on Platform X, on-chain analyst Darkfost revealed that a significant number of short-term Bitcoin investors have begun to close their positions and realize their losses.
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Darkfost’s analysis was based on the net realized profit/loss metric, which tracks the net amount (in USD) of profits or losses made on-chain. This metric measures the net profit or loss daily, averaged, in this case, over seven days. It provides information on whether more investors are selling at a loss or with their heads still above water.
According to the crypto expert, losses made by BTC investors have increased to an approximate level of up to $750 million per day, one of the highest levels this current cycle has seen. Interestingly, Darkfost explained that the magnitude of these capitulation events is easily comparable to those observed during the summer 2024 correction.
What is worth noting about this capitulation phase is what will likely follow. According to the analyst, events like this usually precede local minimums. What this means is that after short-term holders (known as the “weak hands”) have handed over their holdings to safer long-term holders (the “diamond hands”), the cryptocurrency has a chance to see a price rebound, an expectation in line with historical trends.
However, on the more cautious side, Darkfost offered a subtle warning that the opposite could also occur in a situation where the market is in an early bearish phase.
Bitcoin Whales Could Be Piling Up Again
Supporting the theory of positive redistribution, a Quick post on Abramchart’s CryptoQuant platform offers a ray of hope for Bitcoin market participants. Referring to the Inflows to Accumulation Addresses (Dynamic Cohort) metric, the analyst highlighted a significant inflow of over 26,500 BTC into whale accumulation wallets.
When large amounts of Bitcoin move, such as of this magnitude, it usually indicates underlying institutional or whale accumulation, as coins are typically transferred from exchanges to these wallets for long-term holding.
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Following historical patterns, this accumulation event is very likely to precede a continued bullish expansion of the flagship cryptocurrency. As Abramchart explained, this entire trend serves as an indication that smart money is “quietly buying the dip.”
At the time of writing, Bitcoin is valued at approximately $106,870, with no significant movement seen in the last 24 hours.
Featured image from iStock, chart from TradingView
