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Cryptomarket Has Absorbed $15 Billion in Net Losses Since Mid-May: What Does It Mean?

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Wed, 07/21/2021 - 09:39
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Alihuseyn Gulu-Zada
According to Glassnode, the cryptomarket has already absorbed more than $15 billion in net losses since mid-May
Cryptomarket Has Absorbed $15 Billion in Net Losses Since Mid-May: What Does It Mean?
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On-chain market analysis firm Glassnode has released interesting data on the latest situation on the cryptomarket. In particular, the statistics are about Bitcoin.

What is the essence of Bitcoin Realized Cap?

The data concerns the indicator Bitcoin Realized Cap. Glassnode explains that this indicator tracks the aggregate value of all coins by price at the time of the last movement.

More specifically, the Bitcoin Realized Cap increases when coins are spent at a net profit. But when those same coins are spent at a loss, Bitcoin Realized Cap goes down.

$15 billion in net losses

Glassnode also reports that, since mid-May, the crypto market has already absorbed more than $15 billion in net losses. It should be noted that earlier in the published weekly report, it became known that most of the BTCs coming into the market now are sold at a loss.

The sales are initiated by users who bought the crypto-asset at its peak price in the spring. At press time, Bitcoin is hovering around the $30,000 mark.

BTC Released Cap Graphics

The impact of trading volume

During BTC's latest bullish rise, in which it reached an all-time high above $60,000, new investors came onto the market. They contributed to the growth of the trading volume.

However, with the onset of the bear market, the trading volume dropped dramatically. Most of the traded coins came from users who bought the cryptocurrency at its peak price.

Why did this happen?

This situation arose because the price of BTC has now fallen by more than 50 percent from its all-time high of $64,895. The flagship cryptocurrency has been trading in a wide price range of $30,000 to $40,000 since mid-May. On June 22, it briefly fell below $30,000.

Glassnode also found that 33 percent of the BTC in circulation "currently carries an unrealized loss." This means that one-third of the coins were bought at a price above $30,000. Since the price of the crypto-asset first exceeded that mark in 2021, this is about short-term holders.

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About the author

Alihuseyn graduated from Yale University with a focus on linguistics and philosophy. He has worked as a journalist-analyst for Trend News Agency. At the same time, he is an academically trained singer (baritone) and a composer. Alihuseyn has been involved in cryptocurrency and blockchain since 2017 and is an enthusiast in this field, considering blockchain technology revolutionary and capable of changing society. In this area, he has written several theoretical and analytical pieces.