Bitcoin (BTC) Realized Losses This Week Are 3x More Than March 2020 Crash, More Liquidations Coming?

By Bhushan Akolkar
Will Bitcoin Price Recover After $1.7 Billion Liquidation Event?

The world’s largest crypto Bitcoin (BTC) continues to face massive selling pressure and is currently down over 8% moving closer to $20,000. This week has been the week of massive sell-off and liquidations. On-chain data provider Glassnode explains:

“Bitcoin investors have locked in the largest USD denominated Realized Loss in history last week. The $BTC spent on-chain this week realized net losses of over $4.23B. This eclipses all major sell-offs in 2021, and is 3x larger than March 2020″.

Courtesy: Glassnode

Furthermore, Glassnode explains the realized losses faced by short-term holders (STHs) to the tune of 0.01% of the Market Cap per day. But the data provider explains: “Whilst significant, these STH losses are not as large as major sell-offs in the last 5yrs”.

On the other hand, Bitcoin long-term holders have realized major losses equal to 0.007% of the Market Cap per day. It adds: “This is almost as large as March 2020, and is the first major LTH capitulation event in the 2021-22 cycle”.

More Bitcoin Liquidations Ahead?

While Bitcoin had a relief rally after the Fed announcement on Wednesday, it failed to retain its momentum. In the last 24 hours, Bitcoin is seeing another major sell-off trading on tenterhook support of $20,000.

Popular crypto analyst Lark Davis explains: “If Bitcoin loses 20k and #ethereum 1k then things might move real fast, be ready. Lots of liquidations can cause a cascade”.

Speaking to Bloomberg, Galaxy Digital CEO Mike Novogratz said that the chances of the U.S. going into recession have increased. Fed’s ultimate goal currently is to reduce the soaring inflation and it would announce more rate hikes in the year ahead.

Novogratz said that unless the Fed decides to change course from its current QT measures, there’s little hope that Bitcoin would see a reversal. No one knows where the bottom is! But we are surely entering a multi-month consolidation here!

Advertisement
Bhushan Akolkar
Bhushan is a seasoned crypto writer with over eight years of experience spanning more than 10,000 contributions across multiple platforms like CoinGape, CoinSpeaker, Bitcoinist, Crypto News Flash, and others. Being a Fintech enthusiast, he loves reporting across Crypto, Blockchain, DeFi, Global Macros with a keen understanding in financial markets. 

He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills. Bhushan has a bachelors degree in electronics engineering, however, his interest in finance and economics drives him to crypto and blockchain.
Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.