The Bitcoin market is on the verge of volatility amid a gloomy holdings pattern among investors. A new Glassnode report shows Long-Term Holders (LTHs) of Bitcoin are in profit, reflecting early accumulation during lower price periods.
However, as more recent buyers—those who bought at higher prices—transition into LTH status, the proportion of holders with unrealized losses is starting to grow.
This shift typically happens when the market enters a prolonged correction, and has historically marked the onset of a confirmed bear market.
Loss Absorption By LTHs Likely To Put Pressure on Market
The increase in loss absorption by LTHs can put downward pressure on sentiment and market stability. Despite these signals, there is no clear evidence yet of a full bear market regime taking hold.
The market remains in a transitional phase, and future price action will determine whether this trend deepens or reverses. At the press time, the OG-crypto is trading at $85,191.56, up 0.75% as compared to the same time last day.
What Is The Situation of Short Term Holders At Present?
Given the current state of the Bitcoin market, Short-Term Holders (STHs), who are already suffering substantial unrealized losses, may be under increasing pressure.
It is clear from Glassnode data that STHs are seeing losses akin to those seen in the early phases of prior downturn markets when losses are adjusted by percentage drawdown.
This pattern suggests that a large number of recent buyers bought Bitcoin at higher prices and are currently holding their holdings below cost.
The likelihood of panic selling rises if prices stay the same or fall, which could enhance market volatility. Long-Term Holders (LTHs), on the other hand, are typically less responsive to market corrections and stay largely profitable.
Also Read: Robert Kiyosaki Warns Of Greatest Depression, Predicts $1 Million Bitcoin By 2035
Is Volatility In The Market Inevitable?
Losses among Bitcoin holders—especially short-term holders—can significantly impact market volatility.
When a large number of investors hold Bitcoin at a loss, particularly those who bought near recent price peaks, fear and uncertainty often increase.
This can lead to panic selling as holders try to cut losses, creating downward price pressure and amplifying market swings. Additionally, as these loss-holding positions grow, they may trigger stop-loss orders or margin calls, accelerating the sell-off.
On the other hand, long-term holders tend to be more resilient, but if even they begin to absorb substantial losses, it could signal deeper market stress. The collective behavior of holders in loss can therefore serve as a volatility catalyst, influencing overall sentiment and market direction.
Also Read: “Bitcoin Has Failed To Benefit From Safe Haven Flows,” Says JPMorgan As Gold Attracts Record Inflows