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In the biggest selloff in Bitcoin history, Bitcoin investors have lost over $7 billion over three days.
Data from Glassdoor suggests that many investors exited the market at positions lower than where they initially acquired the assets.
Longterm Bitcoin Investors Prompted Selloff
According to the data, the selloff was inevitable as investors offloaded their LTH portfolios. Long-term holders liquidated over 178,000 BTC while the price was under $23000. Some of the investors settled losses up to 75% given that they bought at ATH for $69,000 in November. Likewise, there was over $436 million in Bitcoin futures liquidation.
The dumped coins account for up to 1.35% of the total Bitcoin holdings. As a result, the total market capitalization of Bitcoin dropped to around $350 billion. Bitcoin price also crashed to about $18,000, a decline of over 70% from its value in November.
While the coin has retraced and is currently trading above $21,000, the selloff has sparked off real fears that faith in Bitcoin may be wavering. This may cause further panic in an already troubled cryptocurrency market.
Bitcoin Price May Bottom Out
Meanwhile, several analysts are suggesting that Bitcoin may have reached a market bottom. Pointing to the Percent Supply in Profit (PSP), cryptocurrency analyst Marcus Sotiriou noted that the asset has historically bottomed out with PSP between 40% and 50%.
“We can see that as prices hit the $17,000 lows [Sunday], just 49% of the $BTC supply was in profit,” Glassdoor said.”
Bitbank analyst, Yuya Hasegawa, also shared similar thoughts while noting that Bitcoin could have dipped further over the weekend. “Bitcoin still has a downside potential but if its PSP goes below 50%, then the price could finally bottom out.”
Sotiriou expects more forced liquidations to cause Bitcoin to bottom out. However, Sotiriou also noted that this is the first time that a Bitcoin selloff has occurred alongside persistent inflation. “We cannot be confident of a sustained uptrend until inflation convincingly slows down,” he concluded.
As it stands, the trading volume suggests that investors are being cautious. With the cryptocurrency market bouncing, some investors are turning to altcoins like SNX to maximize their profits. At the time of writing, Bitcoin was trading at $21,321.05, according to CoinMarketCap.