Bitcoin (BTC) sellers are losing out as the fall in BTC prices shows that some investors are panicking about the current price.
Data from the analysis company Glassnode and the trading group Decentrader show that more and more BTC units have sold smaller coins than they bought in January.
Online loss sales are now “permanent”
Although no one wants to sell a non-profit asset, bitcoin’s bearish trends tend to get a certain group of market participants to do so anyway, for fear of huge losses if they continue to trade.
Long-term investors often mock this wave of panic, arguing that the strongest and most liquid players will take the bid at the expense of those who sold.
By analyzing the SOPR ratio, Decentrader analyst Philip Swift found that although total sales were still relatively low, panic arose this year.
He summed up this week for his Twitter followers: “SOPR (Profit Spent Ratio) has seen a steady period of net sales loss lately.”
SOPR uses a summary of BTC’s “purchase price vs asking price” data over a given period to give an overall impression of whether sellers are making a profit or loss.
As creator Renato Shirakachi points out, the psychology of selling at a loss means that only those in a panic can do so, so lower sales this month may be a reason for relief.
“It is interesting to note that sales in recent months have been much lower compared to the bear market in 2018/19, but much deeper than what we saw in some of the upswings,” Swift added.
“Is this a beef market or a bear market?”
Graph of the percentage of revenue spent on Bitcoin issuance (SOPR) (screenshot). Source: Decentrader
As Cointelegraph reports, bitcoin price activity has surprised by a 50 percent decline since November, somewhat out of character for what should be the most bullish part of the halving cycle.
Zooms out, the whole of 2021 may look like a consolidation zone after the fast rally a year ago.
Large players dominate transactions
In the meantime, if sales are made by small retail investors, it will be in line with other data on online transactions.
Related topics: Derivative data shows Bitcoins $ 39,000 Bounce Just a Bounce
As Glassnode confirmed this week, most transactions currently involve large amounts of $ 1 million or more. The company concluded that this points to institutions, not retail, as the driving force of the chain.
“Institutional flows continue to dominate bitcoin transfer volumes, with over 65% of all transactions exceeding $ 1 million,” the tweet read.
The upward trend of institutional volume dominance in the chain began around October 2020 when prices ranged between $ 10,000 and $ 11,000.