Bitcoin experiences the “deepest correction” in 24 months, impacting the short-term holders (STHs) with unrealized losses, according to onchain data from Glassnode.
Data from Cointelegraph Markets Pro and TradingView reveals that in the latest drawdown, the price of Bitcoin dropped by more than 16.5% from a high of $63,801 on July 1 to set a swing low at $63,499 on July 5 in what Glassnode describes as the “deepest correction since late 2022.”
“Between May and July, the market experienced its deepest cycle correction, recording a drawdown exceeding -26% from the ATH.”
Despite this downturn, Glassnode’s The Week On-chain report notes that the correction is notably shallower compared to past cycles. It points to a strong market structure and “reduced volatility as Bitcoin matures as an asset class.”
“If we assess price performance relative to each cycle low, the 2023-24 market has behaved eerily similar to the last two cycles (2018-21 and 2015-17). The reason for Bitcoin following such a similar path is a regular topic of debate, but it continues to provide a valuable framework for analysts to think about cycle structure and duration.”
Glassnode analysts found that with the sell-off, 83% of the supply controlled by short-term holders—addresses that have held Bitcoin for less than 155 days—has fallen into unrealized losses.
According to the chart below, 2.9 million BTC (approximately $166.75 billion at current rates) of the 3.2 million BTC ($184 billion) held by STHs were pushed below their cost basis with the recent sell-off to $53,000.
According to Glassnode analysts, this placed significant pressure on Bitcoin and the wider crypto market.
As long as BTC price remains below $58,000 for the next few days, the long-term outlook for Bitcoin price will remain bearish as this level acts as a significant resistance zone.
At the time of publication, Bitcoin was trading at $57,485 and was fighting stiff resistance in its recovery path compared to the support it enjoyed on the downside.
The chart below corroborated this, showing that the 200-day exponential moving average (EMA) at $58,180 posed the first resistance line for the bulls. Another barrier could emerge from the $63,880 level, where both the 50-day and 100-day EMAs appear to converge.
Aggressive selling from this supplier congestion zone may curtail any attempts to push the price higher as investors book profits or break even.
Popular analyst Daan Crypto Trades observed that reclaiming the 200-day EMM and holding above $59,000 would be a “good start” for Bitcoin bulls.
Liquidation data from Coinglass shows high short bids building up near the 200-day EMA at $58,587, asserting the importance of this level.
