Lowest weekly close since August for Bitcoin as short-term holders move into losses

• Bitcoin dropped below $75,000. Heavier weekend selling left it with its lowest weekly close since August.
• A decline in Bitcoin’s realised profit-to-loss ratio to -0.63 coincided with short-term holders moving into unrealised losses.
• At $37 billion, futures open interest stayed high even as long positions were liquidated and market exposure contracted.

Bitcoin (BTC) dropped below $75,000 on Tuesday. The move followed its lowest weekly close since August, with selling pressure leaving recent buyers nursing losses.

-0.63 profit-to-loss ratio highlights pressure on short-term Bitcoin holders

Monday’s Glassnode Market Pulse reports that short-term holders (STHs) are nearing break-even levels as realised losses rise relative to profits. Investors who purchased Bitcoin during the recent recovery are therefore under increasing pressure from the continuing price decline.

Over the past seven days, the share of Bitcoin’s circulating supply held in profit fell by 3.8% to 60.6%, Glassnode’s profit and loss indicators show.

The price retreat also sharply eroded unrealised gains, with Net Unrealized Profit/Loss (NUPL) falling from 3.4% to 1.1%. Short-term holders, taken together, were carrying a small unrealised loss by Sunday.

A fall in the realised profit-to-loss ratio from -0.21 to -0.63 also signalled that investors were crystallising substantially larger losses than profits.

Glassnode wrote: “Loss realization now clearly dominates, a sign of fear-driven selling, although the reading has not reached its low band,”

$37 billion in open interest leaves leverage high after liquidations

Stress was also evident in Bitcoin’s derivatives market. Even so, the latest sell-off has not fully flushed out leveraged positions.

Over the past week, futures open interest contracted by 1.1%, from $37.4 billion to $37 billion. Position closures during Thursday’s sell-off and a further wave of long liquidations on Sunday drove the reduction, according to Glassnode.

Open interest nevertheless sits close to the upper end of its historical range, indicating that substantial leverage remains in the market.

A 7.1% fall in long-side funding payments, from $3.1 million to $2.9 million, still left them above their upper historical band.

Glassnode said bullish traders were still paying a sizeable premium to retain perpetual futures positions, even with Bitcoin under pressure. Leveraged positioning thus remains skewed towards longs.

Increasing caution among market participants is evident in options positioning too.

Glassnode stated: “Options still price more turbulence than the market delivers, but the gap has narrowed sharply, so option buyers now pay a smaller premium over realized moves than last week,”

-$91.8 million spot CVD signals insufficient demand to offset selling

A lack of demand amid renewed market pressure was reflected in Bitcoin’s swift slide to $75,000. From $6.6 million a week earlier, spot cumulative volume delta (CVD) dropped to -$91.8 million. Meanwhile, a 13.3% rise in spot trading volume to $6.4 billion pointed to heightened activity during the week’s price fluctuations.

Outflows from US spot Bitcoin ETFs occurred on four of the five trading days. Their aggregate weekly outflow was the largest since early July.

Despite the leading cryptocurrency setting a new low, Glassnode noted that Bitcoin’s price momentum rebounded from below its lower historical band to finish the week slightly higher.

The report stated: “Momentum stays weak, but it no longer confirms the decline, a sign that the selling has lost some of its force,”

At the time of writing, BTC trades at $74,700, a decline of 0.1% over the past 24 hours.