As volatility engulfs the cryptocurrency market amid war tensions, on-chain data shows that the Bitcoin short-term holders are selling at a loss.

Bitcoin Short-Term Holders Just Made Large Exchange Inflows At A Loss

In a new post on X, CryptoQuant author Axel Adler Jr has discussed how Bitcoin short-term holders have reacted to price volatility stemming from rising tensions in the Middle East following US strikes on three nuclear facilities in Iran.

Short-term holders (STHs) refer to BTC investors who purchased their coins within the past 155 days. In contrast, holders with a holding period longer than 155 days are called long-term holders (LTHs). The STH group includes new entrants and low conviction holders, who tend to panic easily during market changes. Conversely, LTHs are market veterans who usually ride out crashes and rallies.

Given the recent sharp price action in the sector, it was expected that some STHs would take action. On-chain data confirms this.

The chart shared by the analyst depicts the profit and loss exchange deposit transactions made by STHs. Investors typically transition to centralized platforms when they want to sell, making inflows an indicator of elevated selling.

The graph reveals that loss transactions from this group have totaled 14,700 BTC. While this is lower than two significant capitulation events from recent months, it remains significant. It indicates that some STHs are exiting the market despite incurring losses.

Additionally, profitable transfers have remained relatively low at 3,100 BTC. This decline reflects the minimal profit left for STHs due to the price drop, as noted by on-chain analytics firm Glassnode in a post on X.

Charting the trend of the STH Realized Price, which tracks the average acquisition cost for STHs, shows that during the crash, the price nearly retested this level, and even after a rebound, it remains close, indicating tight profit margins for this cohort.

BTC Price

At the time of writing, Bitcoin is trading around $101,300, down over 5% in the last week.

Featured image from Dall-E, Glassnode.com, CryptoQuant.com, chart from TradingView.com