Curious behavior sees investors selling coins for less than they purchased them for, with Bitcoin still notionally in a bullish uptrend.
Bitcoin sellers are mounting losses as the Bitcoin 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 Bitcoin entities have been selling coins for less than they purchased them.
On-chain loss selling now “consistent”
While no one wants to sell an asset without profit, Bitcoin downtrends tend to see a certain amount 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.
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.
“Is this a bull or bear market rn?”
Bitcoin’s price activity has surprised us 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.
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,” .
“The uptrend in institutional dominance in onchain volumes started around Oct 2020 when prices were around $10k to $11k.”
Bitcoin transfer breakdown annotated chart. Source: Glassnode/Twitter
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