In the medium term view, i.e. in the last six months to a year, the Bitcoin (BTC) price chart screams “bear market”. As of November 2021, the cryptocurrency was worth $68,000. Since mid-June of this year, however, BTC has dropped by around 70%, reaching $22,000. However, even with this scenario, there are still investors who are making a profit. More precisely, just over 50% of investors have unrealized net income. Last week, Bitcoin closed up 9.15% and was above $22,000, or BRL 111,000 at current rates. It was the second consecutive week in which BTC closed with appreciation, which helped boost investor performance.
50% of investors still profit
Even before this appreciation, nearly 50% of BTC holders were in positive or unrealized gain territory. This is in line with a metric called Net Unrealized Profit or Loss (NUPL). “Unrealized” simply means that the investor has not sold his asset. Therefore, the NUPL is a metric that estimates how much investors would gain or lose if they sold at the current average market price. Just before the sudden rise in the price of BTC last week, 47% of investors had a profit in their hands, according to some estimates. After the appreciation, which occurred especially at the weekend, the number grew above 50%. Another estimate from earlier this week, based on CryptoQuant data analysis, fixes this percentage at an even tighter margin, with NUPL at -0.07. When the number is positive, more investors retain unrealized profits and when it is negative, more investors retain unrealized losses. With this number so close to 0, the percentage of BTC at a profit is almost equal to the percentage at a loss – again, if the investor sold on the day the metric was evaluated.
Losing BTC Addresses Decreased
Other data pointed to by analytics firm Glassnode also shows the number of 7-day BTC addresses at a loss, reaching parity with addresses at a profit in late August and this month. Meanwhile, long-term holders are holding their BTC and moving them off exchanges. A SAXO Markets report earlier in the month noted that: “In the month of August, Bitcoin exchanges experienced a net withdrawal. About 9% of the total supply is now on exchanges, up from 12% at the start of the year. A lower foreign exchange balance is generally associated with a decrease in potential selling pressure.” Even in March, with the BTC price in sharp capitulation to November-January prices and facing massive resistance, only 40% of holders were at a loss. As for net balances, the drop indicates that there are fewer investors willing to sell their BTC, which lessens the BTC selling pressure. Read also: Chance of The Merge to fail is 10%, says analyst Read also: Google launches countdown clock for The Ethereum Merge Read also: Starbucks integrate NFTs into loyalty program in partnership with Polygon
