According to some analysts, Bitcoin is still in an uptrend conceptually. Despite this, investors say that they are selling their cryptocurrencies for less than they bought them. The losses of Bitcoin (BTC) investors and the drop in BTC price indicate that some investors are panicking.
According to data from renowned analytics firms Glassnode and Decentrader, Bitcoin (BTC) is selling well below purchased prices in January 2022.
Panic Sales Are Made in the Market
No investor wants to sell their assets without making a profit. However, Bitcoin shows a downtrend and pushes investors to sell their holdings. This panic selling seems to favor long-term investors, and these investors plan to use this supply against others over time.
Analyzing the spent profit output ratio (SOPR) metric, Decentrader analyst Philip Swift reveals that panic is brewing this year, even as overall sales remained relatively low. According to SOPR data, there has been a serious panic selling lately.
SOPR often provides analytics that periodically look at total purchased price and sold price data for BTC, showing whether sellers are making a profit or a loss.
Bitcoin’s price trend surprises everyone with its 50% pullback since November. However, this process cannot be called a definite bear market.
Institutional Investors Return to the Market
As Glassnode noted this week, most transactions currently involve sums of $1 million or more. According to the firm’s conclusion, this is because institutional investors, not individual, are the real power in the market. Bitcoin’s transfer volume continues to be dominated by institutional-sized flows, with over 65% of all transactions greater than $1 million. Institutional dominance began precisely in October 2020. 2022 is declared as the year when institutions return to the Bitcoin market in real terms.