[Analysis] 73% of Short-Term Bitcoin Holders Are Underwater; Recovery May Take Time

Bloomingbit

Seventy-three percent of short-term Bitcoin holders are now sitting on losses, a sign that selling pressure could persist even if the cryptocurrency rebounds.Murphy, a cryptocurrency analyst, wrote on X, formerly Twitter, on November 15 that the STH-PSIL indicator, which measures the share of short-term Bitcoin holders in loss, had risen to 73%. That means more than seven out of 10 investors who recently bought Bitcoin are now underwater.During the previous bull cycle, the indicator stood at 51% in the first price correction and 67% in the second, Murphy said. This time, the share of loss-making investors has already jumped to 73% after just the first correction.A similar pattern was last seen in 2019 and 2020, he added. In the first correction of that period, the share of short-term investors in loss climbed as high as 97%.Murphy said Bitcoin could need significant time to recover. With a large number of loss-making investors now built up, selling pressure may emerge whenever the token reaches major price levels. In 2019, it took about a year for Bitcoin to return to a full-fledged uptrend.