Recent data by IntoTheBlock shows a crash to $9,000 could potentially send 1.17 million Bitcoin (BTC) addresses below the profit line.
Still A Lot of Bitcoin Traders Trapped Above $10K
Based on data collected by blockchain analysts, the latest bitcoin flash crash toward $9,600 support levels has meant that even more wallet addresses containing BTC are now ‘out of the money’.
So far, over 71% of all BTC addresses are still in the money, and many could sell at a great profit. However, a breakdown closer to $9,000 would send another 1.17 million addresses below the break even point.
The actual number of wallets, as well as the actual owners of those wallets, cannot be determined. Also, while “hodling” has been advised in cases of market dips, there are plenty of ‘weak hands’ who panic sell whenever bitcoin’s price declines.
BTC active addresses have indeed shown that most tend to hold onto their coins, as the number of active addresses is consistently lower since last year’s peak rally. Currently, there are more than 600,000 active addresses per day.
Transactions per day remain about 330,000, at levels not signaling a buying or selling panic. Transaction value, however, is higher, with over $1.8 billion per day moving between addresses.
Still, the data remains encouraging in that a majority of investors are still in the money. If Bitcoin can return above $10,000, a significant amount of later investors will be back in profit. There is, however, a significant subset that bought in above $10,000 and at peak prices above $19,000, but most BTC adoption and “hodling” started at much lower levels.
BTC Slide Continues, Earlier Buyers May be Affected
BTC moved down to $9,581.07, continuing the slide. If the trend is preserved, some recent buyers around the $8,000 level may soon be exposed to the risk of seeing their investment underwater. Yet some of the largest cohorts of addresses start from a $4,000 price level, a tier not likely to be reached soon.
On-chain flows to exchanges, however, remain relatively tame, based on TokenAnalyst data.
? Feb-18 $BTC on-chain flows:#binance $89.8M in | $85.6M out#bitstamp $33.4M in | $33.3M out#bitmex $33.9M in | $27.7M out#bitfinex $19.2M in | $19.8M out#huobi $61.7M in | $64.3M out#kraken $36.5M in | $49.9M out#okex $55.2M in | $34.2M out
— TokenAnalyst (@thetokenanalyst) February 19, 2020
The current BTC price fluctuations are also heavily influenced by futures markets, where position-taking and price bets do not need to correlate with actual on-chain and wallet activity. Yet owning physical BTC may be an advantage in the future, as well as the chief rationale for not moving the coins.
What do you think about the price of BTC as it affects wallet owners? Share your thoughts in the comments section below!
Images via Shutterstock, IntoTheBlock, Twitter @thetokenanalyst