‘Bull or bear market?’ Bitcoin losses from panic selling mount in 2022

‘Bull or bear market?’ Bitcoin losses from panic selling mount in 2022

Bitcoin (BTC) sellers’ losses are mounting as the BTC price downturn shows that some investors are panicking at current prices.

Data from on-chain analytics firm Glassnode and trading suite Decentrader shows that in January, more and more BTC entities have been selling coins for less than they purchased them.

Our top trading bots

On-chain loss selling now “consistent”

While no one wants to sell an asset without profit, Bitcoin downtrends tend to see a certain cohort of market participants do so anyway — for fear of greater losses if they stay put.

This panic selling is often derided by long-term investors, who argue that stronger, more liquid players will scoop up the supply to the detriment of those who sold.

Analyzing the spent profit output ratio (SOPR) metric, Decentrader analyst Philip Swift revealed that while selling overall remains relatively low, panic has set in this year.

“SOPR (Spent Output Profit Ratio) has had a consistent patch of on-chain loss selling recently, he summarized to Twitter followers this week.

SOPR takes the aggregate “price bought versus price sold" data for BTC in a given period to produce an overall impression of whether sellers are in profit or at a loss.

As noted by its creator, Renato Shirakashi, the psychology of selling at a loss means that only those in panic mode are likely to do so, and by extension, the shallower selling this month could be cause for relief.

“It’s interesting to note that the selling at a loss the past few months has been much more shallow vs. 2018/19 bear market, but much deeper than we saw in either bull run period,” Swift nonetheless added.

“Is this a bull or bear market rn?”
‘Bull or bear market?’ Bitcoin losses from panic selling mount in 2022
Bitcoin spent profit output ratio (SOPR) chart (screenshot). Source: Decentrader

As Cointelegraph reported, Bitcoin’s price activity has surprised with its 50% retracement since November, this being somewhat uncharacteristic of what should be the most bullish part of its halving cycle.

Zooming out, the whole of 2021 arguably looks like a consolidation zone after rapid gains a year ago.

Big players dominate the transactions

Meanwhile, should selling be from low-volume retail investors, this would chime with other data covering on-chain transactions.

Related: Derivatives data suggests that Bitcoin’s $39K bounce was a mere blip

As Glassnode confirmed this week, the majority of transactions now involve significant sums of $1 million or more. This, the firm concluded, points to institutions, not retail, as the driving on-chain force.

“Bitcoin transfer volumes continue to be dominated by institutional size flows, with more than 65% of all transactions being larger than $1M in value,” a tweet read.

“The uptrend in institutional dominance in onchain volumes started around Oct 2020 when prices were around $10k to $11k.”
‘Bull or bear market?’ Bitcoin losses from panic selling mount in 2022
Bitcoin transfer breakdown annotated chart. Source: Glassnode/Twitter

2022 has been announced as the year in which institutions indeed return to the Bitcoin space.

Continue reading on Cointelegraph
OpenSea acquires Dharma Labs and a new CTO
OpenSea announced Tuesday the acquisition of Dharma Labs, a cryptocurrency lending platform and digital wallet, for an undisclosed amount. According to...
Samsung announces NFT platform for smart TVs
South Korean tech giant Samsung revealed a new smart TV lineup with an integrated nonfungible token (NFT) platform. Samsung’s 2022 smart TVs such as Micro...
Crypto exchange Kraken acquires non-custodial staking platform Staked
Major cryptocurrency exchange Kraken has announced that it purchased blockchain infrastructure company and investment manager Staked for an undisclosed...
Adidas Originals to launch debut NFT collection
Adidas Originals have announced the upcoming launch of their nonfungible token (NFT) collection titled Into the Metaverse.Although details on the supply...
How cautiously bullish Bitcoin traders use options to maintain BTC exposure
Bitcoin (BTC) traders appear undecided on the next step and this is reflected in the price oscillating between $58,400 and $63,400 over the last 14 days....
Secret, Curve and Shiba Inu gains suggest that altseason is coming
Calls for an altseason continue to grow louder as the price action in the altcoin market has been on the rise for a few days. Meanwhile, Bitcoin (BTC) continues...
Polygon can hit $3.50 in Q4 as MATIC’s 20% weekly rally triggers bull flag setup
Polygon (MATIC) has the potential to reach $3.50 by the end of this year as it charts a pattern that’s starting to resemble a bull flag.In detail, bull...
Evolve or die: How smart contracts are shifting the crypto sector’s balance of power
One of the familiar themes seen in previous crypto market cycles is the shifting market caps, popularity and ranking of the top 10 projects that see significant...
Unstable Bitcoin price to pivot investment flow to gold, mining chief says
Jake Klein, CEO of Australian gold mining establishment Evolution Mining, has said that crypto price volatility will make gold a far more attractive proposition.Speaking...
Binance CEO wants to 'work with regulators' as the exchange expands
Changpeng Zhao, the chief executive officer and founder of Binance, has said he wants the major cryptocurrency exchange to work with local regulators as...
Bitcoin Climbs 10% As Investors Gain Confidence
Investing.com - Bitcoin was trading at $39,033.0 by 19:54 (23:54 GMT) on the Investing.com Index on Sunday, up 10.05% on the day. It was the largest one-day...
Elon Musks lays out when Tesla will begin accepting Bitcoin payments
Tesla CEO Elon Musk says his electric-vehicle company will start accepting Bitcoin (BTC) payments once there’s confirmation that miners are utilizing clean...
Theta and Theta Fuel (TFUEL) soar ahead of June 30 mainnet launch
Major protocol upgrades can play a significant role in altcoin rallies regardless of the state of the wider cryptocurrency market because new features excite...
Bank of Thailand plans to regulate asset-backed stablecoins this year
The Bank of Thailand, or BoT, is upping its game on the stablecoin front. This week, the institution warned citizens that Thai Baht Digital (THT), a baht-pegged...
Altcoin to Invest: Dash
Among the large cryptocurrencies number, there are just a few that can compete with Bitcoin. Users often quickly lose interest in new altcoins. Dash has...