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Being three weeks removed from the FTX collapse, Bitcoin (
$78,298.00 ) (BTC) analysts are combing through data to decipher whether more selling will continue or if a bear market floor has been reached.
One thing miners, short-term and long-term holders have in common is they are losing in the Bitcoin ( $78,298.00 ) market right now.
According to on-chain analysis from Glassnode, the scale of both realized and unrealized losses amongst Bitcoin ( $78,298.00 ) holders is one of the heaviest capitulation events in BTC’s history. Capitulation is hindering all groups from the increasing number of bankruptcies and dwindling miner revenue.
Bitcoin ( $78,298.00 ) ’s realized losses fourth largest on record while unrealized losses increase
November recorded $10.8 billion in 7-day realized losses for Bitcoin ( $78,298.00 ) . The largest recorded realized loss in Bitcoin ( $78,298.00 ) ’s history is June 2022 when $19.8 billion was recorded. Such losses show that a large volume of Bitcoin ( $78,298.00 ) has changed hands at discounted prices.
Bitcoin ( $78,298.00 ) realized 7-day losses. Source: Glassnode
A popular crypto investing saying is “you cannot lose if you do not sell.” Unrealized losses track the entire Bitcoin ( $78,298.00 ) market versus total market capitalization. The November 2022 56% unrealized loss is the largest in the current bear market. In 2014-2015, unrealized losses hit an all-time high for Bitcoin ( $78,298.00 ) holders at 86%. The current unrealized losses are the fourth largest in Bitcoin ( $78,298.00 ) ’s history.
According to Glassnode analysts:
“This metric has recently peaked at 56%, which is the highest for this cycle, and comparable to prior bear market floors.” Bitcoin ( $78,298.00 ) unrealized losses 7-day moving average. Source: Glassnode
Block times slow down as Bitcoin ( $78,298.00 ) miners struggle
Bitcoin ( $78,298.00 ) investors are not the only group capitulating in the current market. Bitcoin ( $78,298.00 ) miners are struggling to remain profitable with the depressed prices.
There it is. Hash Ribbon miner capitulation confirmed. Triggered by the $10B FTX fraud and subsequent collapse, Bitcoin ( $78,298.00 ) miners are now going bust and Hash Rate is trending down. pic.twitter.com/TorX7PzrNu
— Charles Edwards (@caprioleio) November 28, 2022
Since Bitcoin ( $78,298.00 ) miners are under pressure to remain financially viable, this affects the BTC mining hash rate. A reduction in Bitcoin ( $78,298.00 ) ’s hash rate slows down BTC transactions. According to HashRate Index, block times reached over 11 minutes.
Bitcoin ( $78,298.00 ) ’s hashrate is dropping like a rock↘️
Bitcoin ( $78,298.00 ) ’s 7-day average hashrate is currently 236 EH/s, a 14% decrease from its 274 EH/s ATH
Block times are sluggish as a result: 11 minutes and 12 seconds on average this epochhttps://t.co/JN7OmpJ8X0 pic.twitter.com/ckxqEqOGqX
— Hashrate Index (@hashrateindex) November 28, 2022
Despite the current challenges, analysts believe that capitulation is healthy for starting the next bull run. Glassnode notes:
“One consistent event which motivates the transition from a bear back towards a bull market is the dramatic realization of losses, as investors give up and capitulate at scale.”
With so many groups currently at a loss at this stage of the bear market post-FTX collapse, Bitcoin ( $78,298.00 ) and overall market sentiment will need to improve to spur new money to drive a bull run. Without improved sentiment, the capitulation may not match previous Bitcoin ( $78,298.00 ) cycles.
The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
