The recent drop in the price of Bitcoin below $60,000 sent shockwaves through the cryptocurrency market as major holders like the German and US governments engaged in rapid selling. This resulted in one of the largest drops witnessed for Bitcoin in the past two years, causing billions of dollars in losses for the market.
Despite the significant market crash, the majority of Bitcoin holders are still enjoying profits. Data from the on-chain tracker IntoTheBlock reveals that out of the approximately 53.57 million Bitcoin holders worldwide, 83% are currently in profit. This means that only around 17% of Bitcoin holders are not seeing profit at the moment.
Out of the 17% of Bitcoin holders not currently in profit, 13% are experiencing losses as they bought their coins at a higher price than the current value. The remaining 4% of holders are at breakeven, having purchased their coins around the current price. This leaves around 44.61 million Bitcoin investors still enjoying profits, while 6.8 million are facing losses and 2.16 million are at breakeven.
There is a concerning trend affecting long-term holders of Bitcoin, with the average returns of these investors at risk of falling into losses for the first time in over a year. However, this could present a buying opportunity as historical data suggests that Bitcoin tends to respond positively when the average long-term holder returns are in the red.
According to a Sentiment report, when Bitcoin’s 30-day and 365-day MVRV are in negative territory, it can be a favorable time to buy. This indicates that buyers are acquiring BTC relative to other traders’ pain, potentially leading to significant returns. In fact, historical data shows that buying during similar market conditions in the past has resulted in returns of over 100%.
While the recent price drop may have caused panic in the market, it is evident that the majority of Bitcoin holders are still profitable. The data suggests that even with a further 10% crash in the price, most investors would still be in profit. Additionally, long-term holders may find the current market conditions as a promising buying opportunity, potentially yielding substantial returns in the future.
