The majority of bitcoin addresses have now lost money
More than half of all bitcoin addresses are in the red for the first time in more than two years, according to the latest data.
Figures from blockchain data firm Glassnode reveal that the number of BTC addresses sent to exchanges is at a 23-month low, with some analysts suggesting that both metrics could signal an end to several major short-term sales.
A series of sell-offs over the past year has seen the price of bitcoin fall from a record high of nearly $69,000 last November to below $20,000.
The downturn follows similar price cycles, which have seen bitcoin hit all-time highs roughly every four years before experiencing a massive correction.
With bitcoin’s price remaining relatively stable in recent months, there has been much speculation as to whether it has bottomed out. Previous cycle bottoms have seen the proportion of addresses in profit fall to around 40-45 per cent.
When comparing the current price of bitcoin to the price of the coins when they last moved between addresses, only 49.4 percent of addresses are in profit, suggesting that there could be further losses.
“Bitcoin has been one of the fastest-accelerating asset classes in history: Trading for fractions of a penny 14 years ago, it ran all the way up to $69,000 last year,” said CoinJournal analyst Dan Ashmore.
“It is against this context of outrageous gains that shows how remarkable it is that most of the bitcoin supply is now loss-making.”
The last time more than half of bitcoin addresses were in the red was in March 2020, when panic surrounding the emergence of the Covid pandemic caused a market-wide crypto crash.
This has given some investors hope that the price of bitcoin will rebound, potentially even signaling an end to the so-called crypto winter that has seen the total cryptocurrency market fall from close to $3 trillion last November to below $1 trillion today .
The price of bitcoin has seen a slight increase in recent days, rising nearly 10 percent to take it to its highest level since mid-September.
Fuad Fatullaev, co-founder and CEO of the Web3 ecosystem WeWay said that the positive price growth could serve as the basis for a new uptrend.
“[Bitcoin’s] growth has been enabled by a number of fundamental factors, including the UK MP’s vote to recognize bitcoin and crypto as regulated financial instruments, he said The independent.
“While it is still relatively early to call the current rally another rally, we can expect bitcoin to breach the $20,800 level if the buying momentum is sustained before the weekend.”
