Bitcoin

<h2 id="key-points">Key Points</h2> 
<ul> 
 <li>Bitcoin purged market speculators following a “correlation-1” event.</li> 
 <li>Liquidations reached $365 million, according to Glassnode data.</li> 
</ul> 
<p>In a new report, Glassnode reveals important data about a mid-cycle wipeout that saw huge liquidations amongst short-term holders (STH).</p> 
<p>A Black Monday occurred on August 5 which saw declines across both equity and digital asset markets, following a “correlation-1” event, as noted by Glassnode.</p> 
<p>A “correlation-1” event typically refers to a situation in financial markets where assets that usually show little to no correlation suddenly start moving in the same direction with a correlation coefficient of almost 1. In other words, during such an event, the returns of different assets become highly positively correlated.</p> 
<p>August 5 saw a notable decline in equities and assets markets and Bitcoin was no exception, as Glassnode notes.</p> 
<p>On Monday, Bitcoin recorded its largest drawdown of the cycle, seeing price drops from above $58,000 to levels below $50,000.</p> 
<h2 id="bitcoin-sths-the-largest-unrealized-loss-since-ftx">Bitcoin STHs – The Largest Unrealized Loss Since FTX</h2> 
<p>Bitcoin short-term holders came under high pressure following this week’s Bitcoin price crash. STHs are entities holding BTC for 155 days tops, while long-term holders (LTHs) hold for more than 155 days.</p> 
<p>STHs are more sensitive to market volatility compared to LTHs and the beginning of this week and the market decline confirms this.</p> 
<p>Glassnode reveals the extent to which overleveraged traders have been removed from the market.</p> 
<p>In their <a href="https://insights.glassnode.com/the-week-onchain-week-32-2024/" rel="nofollow noopener" target="_blank">notes</a>, Glassnode revealed that STHs are currently holding the largest unrealized loss since the FTX implosion which highlights a point of serious investor stress imposed by current market conditions.</p> 
<p>The evaluated percentage of STHs supply held in profit shows that 7% of the supply is held in a profitable position, which is similar to the sell-off in August 2023.</p> 
<p>Glassnode also noted that this is also more than -1 standard deviation below the long-term average for the metric, suggesting significant financial stress amongst recent buyers.</p> 
<figure style="width: 100%" class="wp-caption alignnone">
 <a href="https://insights.glassnode.com/the-week-onchain-week-32-2024/" rel="nofollow noopener" target="_blank"><img decoding="async" src="https://insights.glassnode.com/content/images/2024/08/Group-137691796.png" alt="Glassnode" width="2000" height="1152" title="Bitcoin Market Speculators Purge - Total Liquidations at $365M 3"></a>
 <figcaption class="wp-caption-text">
  Glassnode
 </figcaption>
</figure> 
<h2 id="sopr-reaches-staggering-depths">SOPR Reaches Staggering Depths</h2> 
<p>Glassnode mentioned another metric Short-Term Holder SOPR that reached significant depths, as new investors saw -10% loss on average.</p> 
<p>This is a form of capitulation with only 70 trading days ever registering a lower value.</p> 
<figure style="width: 100%" class="wp-caption alignnone">
 <a href="https://insights.glassnode.com/the-week-onchain-week-32-2024/" rel="nofollow noopener" target="_blank"><img loading="lazy" decoding="async" src="https://insights.glassnode.com/content/images/2024/08/Group-137691802.png" alt="Glassnode" width="2000" height="1152" title="Bitcoin Market Speculators Purge - Total Liquidations at $365M 4"></a>
 <figcaption class="wp-caption-text">
  Golassnode
 </figcaption>
</figure> 
<h2 id="365m-in-total-liquidations">$365M in Total Liquidations</h2> 
<p>Glassnode revealed data related to derivatives markets where a large volume of long positions were forced closed with a total volume of $275 million worth of long contracts liquidated.</p> 
<figure style="width: 100%" class="wp-caption alignnone">
 <a href="https://insights.glassnode.com/the-week-onchain-week-32-2024/" rel="nofollow noopener" target="_blank"><img loading="lazy" decoding="async" src="https://insights.glassnode.com/content/images/2024/08/Group-137691804.png" alt="Glassnode" width="2000" height="1152" title="Bitcoin Market Speculators Purge - Total Liquidations at $365M 5"></a>
 <figcaption class="wp-caption-text">
  Glassnode
 </figcaption>
</figure> 
<p>Also, $90 million in shorts were liquidated, bringing the total liquidations to $365 million. This shows how many leveraged speculators were purged from the market.</p> 
<p>Regarding<a href="https://crypto.ro/en/cryptocurrencies/bitcoin/"> Bitcoin</a>‘s price today, at the moment of writing this article, BTC is trading above $57,000 following the August 5 <a href="https://crypto.ro/en/news/bitcoin-price-reached-49k-amidst-global-financial-collapses-wave/">price dip</a> below $50,000.</p>

Bitcoin Market Speculators Purge – Total Liquidations at $365M

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