CryptoQuant says bitcoin holders are realizing net losses for the first time since October 2023

Blockchain analytics firm CryptoQuant has issued a new report indicating a notable shift in Bitcoin investor behavior. According to their data, bitcoin holders are realizing an aggregate net loss for the first time since October 2023. This metric tracks the difference between the total realized profits and total realized losses when coins are moved on-chain.

Realized Net Loss (RNL) signifies that the combined value of BTC being sold below its purchase price has surpassed the combined value of BTC being sold for profit. This trend breaks a nearly eight-month streak of continuous net profitability across the Bitcoin network, which defined the massive uptrend leading into the 2024 all-time high (ATH).

Analysts attribute this recent capitulation primarily to short-term holders (STHs) who acquired coins during the market peak between March and April 2024. As the price consolidated below $70,000 and faced volatility, these newer investors are selling off their holdings to minimize further depreciation.

The October 2023 period marked a significant inflection point before Bitcoin’s major rally. While the current realization of net losses might seem bearish, CryptoQuant suggests that such events often function as a necessary market cleansing, flushing out ‘weak hands’ and establishing a stronger foundation for subsequent price discovery. However, the market must quickly absorb this selling pressure to prevent a deeper correction.

Source: CryptoQuant says bitcoin holders are realizing net losses for the first time since October 2023