It appears the largest cryptocurrency’s fluctuations are forcing short-term holders to exit their positions. Last week, markets witnessed the largest-ever Bitcoin capitulation in history from short-term investors, according to data released by Glassnode. This capitulation, or dump, is estimated to have cost $3.45 billion to these investors. Short-Term Holders Make Mass Exit from Bitcoin Market For the uninitiated, a capitulation refers to a period of strong sell-offs, when investors give up their positions in an asset due to a price decline. Markets reflect an abnormal volume of sales and price decline in tandem over a short period to indicate that capitulation is underway. According to Glassnode, the net losses realized on-chain during the sell-off exceeded $3.45 billion. The analytics firms also added that this chunk of Bitcoin was bought at a much higher price. The recent dump has made no difference to the positions of long-term holders. Glassnode noted that these investors are still in the green with only $383 million in net losses. Additionally, the analytics firm revealed that nearly 2.44 percent of Bitcoin’s total circulating supply is held in the wallets of these investors. Bitcoin Price Slump After China’s Crackdown Short-term holders participated in a sell-off frenzy after Bitcoin prices slumped below $30,000 last week. Although the currency has recuperated from that level and is trading at $34,000, the mood around it is mostly bearish. The uncertainty about Bitcoin’s future can be attributed to the ongoing crackdown against crypto mining in China, which at one point used to be the world’s crypto mining hub. In a recent report, Glassnode posited that China’s regulations have triggered “the largest migration in Bitcoin hash-power in history”. Glassnode also linked the decrease in mining power with traders across the market exiting their positions while their coin was still underwater. Furthermore, the firm also pointed at low institutional demand as a factor in Bitcoin’s current struggles, while suggesting that the narrative around it and its reality determined the currency’s trajectory in 2020 and 2021.
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