On-chain data shows the Bitcoin Realized Loss has spiked to its highest level since November 2022 as investors have capitulated after the price crash.
Bitcoin Realized Loss Has Hit A Value Of $889 MillionThis metric works by going through the transaction history of each coin being sold to see at what price it changed hands before this. If the previous selling price was greater than the latest spot price for any token, then its sale is considered to be resulting in some loss realization. The exact degree of loss involved in the transaction is equal to the difference between the two prices.
Now, here is the chart shared by Glassnode that shows the trend in the 7-day moving average (MA) of the Bitcoin Realized Loss over the last few years:
As displayed in the above graph, the Bitcoin Realized Loss has witnessed a sharp spike recently, implying investors have participated in a notable amount of loss-taking.
Something to note is that the version of the metric used by the analytics firm here is the “entity-adjusted” one, meaning that it only tracks transactions occurring between two different entities, rather than just two addresses. Glassnode defines an “entity” to be a cluster of addresses that it has determined to belong to the same owner.
In the context of the Realized Loss, the entity-adjusted indicator filters out transactions occurring between the wallets of the same investor. These naturally never involve a true realization of loss (or profit), so removing them from the data provides a more accurate representation of the market.
The latest investor capitulation has arrived as Bitcoin has been in freefall, with its price now breaking below the $70,000 level. It now remains to be seen whether the loss-taking will sustain or if investor panic will subside in the coming days.
BTC PriceBitcoin has taken a blow of more than 21% over the past week that has taken its price to the $66,700 level.
