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Bitcoin plunges below $32,000 and Galaxy's Mike Novogratz expects more volatility: CNBC Crypto World
Bitcoin is off nearly 55% from its November peak, and 40% of holders are now underwater on their investments, according to new data from Glassnode.
That percentage is even higher when you isolate for the short-term holders who got skin in the game in the last six months when the price of bitcoin peaked at around $69,000.
In the last month alone, 15.5% of all bitcoin wallets fell into an unrealized loss, as the world's most popular cryptocurrency plunged to the $31,000 level, tracking tech stocks lower. Bitcoin's close correlation to the Nasdaq challenges the argument that the cryptocurrency functions as an inflation hedge.
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Analysts from Glassnode also noted an influx of "urgent transactions" amid this latest sell-off, in which investors paid higher fees, indicating they were willing to pay a premium in order to expedite transaction times. The total value of all on-chain transaction fees paid reached 3.07 bitcoin over the last week — the largest yet recorded in its dataset.
"The dominance of on-chain transaction fees associated with exchange deposits also signaled urgency," continued the report, further supporting the case that bitcoin investors were seeking to de-risk, sell, or add collateral to their margin positions in response to recent market volatility.
During the sell-off this past week, more than $3.15 billion in value moved into or out of exchanges, the largest amount since the market hit its all-time high in November 2021.
Most wallet cohorts, "from shrimp to whales," have softened in their on-chain accumulation trends, according to the report, referring to both small-scale and large-scale investors.
Wallets with balances of more than 10,000 bitcoin have been a particularly significant distributive force over the last few weeks.
And while there is more conviction among retail investors — data shows that those holding less than 1 bitcoin are the strongest accumulators — the accumulation among these smaller-scale holders is notably weaker than it was in February and March.
Fundstrat Global Advisors is calling a bottom of around $29,000 a coin, and the firm is now advising clients buy one-to-three month put protection on long positions.
—CNBC's Kate Rooney contributed to this report
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