On-chain data shows Bitcoin short-term holders have transferred a large amount of BTC at a loss to exchanges, a sign of another capitulation wave on the network.
The STHs refer to the investors who purchased their Bitcoin during the past 155 days. This cohort is generally considered to include the weak hands of the market, who easily sell at the sight of market volatility.
Usually, the STHs transfer their coins to centralized exchanges when they are looking to sell, so a spike in exchange deposits from the group can be a sign of a selloff.
During downtrends, loss selling is the most common type of distribution from the STHs due to the fact that their cost basis is at recent prices, which tend to be higher in bearish phases.
Now, here is the chart shared by Maartunn that shows the trend in the 24-hour loss exchange inflows made by the STHs over the past month:
As displayed in the above graph, the Bitcoin STHs made a large amount of loss deposits to exchanges when the cryptocurrency’s price crashed to $94,000 last week. The same appears to have followed during the latest downward move in the asset.
In total, STHs have sent 65,200 underwater tokens to the exchanges over the last 24 hours. At the current exchange rate, this amount is worth a whopping $6.08 billion.
This new wave of capitulation wave in the STHs came as BTC dropped toward $89,000. Interestingly, what has followed this FUD from the STHs has so far been a rebound for the asset.
“Panic selling is elevated & clearly rising, now exceeding the loss levels seen at the last two major lows of this cycle,” noted the analytics firm.
Bitcoin witnessed a bounce back to $92,800 during the past day.
