Bitcoin News: New Bitcoin Holders Sell Almost 150K BTC at a Loss

New Bitcoin holders are selling their assets amid the recent price drop. Cryptoquant data shows that the group has now sold over 148,000 BTC at a loss of below $100,000.

Analysts pointed out that the retail or new holders group, which has less than 1 million BTC, sold 148,241 BTC on November 14. This was the day Bitcoin broke the $100,000 support level, signaling a panic sale by the group.

Cryptoquant data shows that the average price of the BTC fire sale was $96,853. However, the group had purchased the BTC at an average price between $102,000 and $107,000, indicating a substantial realized loss.

Analysts say Capitulation of Short-term Holders Could be Good for BTC

Meanwhile, crypto analysts believe the capitulation might be good for Bitcoin in the long term. According to a pseudonymous on-chain data expert, Crazzyblock, this event is a classic capitulation from those who bought Bitcoin near its peak.

They wrote;

“When the market price crashed through the $100,000 support level and fell below their personal cost basis, it triggered a wave of fear. These investors, likely facing their first major downturn, chose to lock in a loss rather than risk steeper declines, transforming their paper losses into real ones.”

However, they consider this sell-off to be beneficial for Bitcoin because it signifies the elimination of weak hands. The analyst noted that the massive volume of BTC sold off at that price suggests a lot of impatient capital got transferred to diamond hands.

Thus, they believe the capitulation to be a necessary reset for the market and expect some stabilization. So far, that stability is not forthcoming, with BTC already down to $95,000, below the price level at which short-term holders (STH) capitulated.

Interestingly, the capitulation of STH has played a significant role in the decline in Bitcoin’s value since it reached its peak. While observers have focused on the profit-taking by long-term holders, a new report shows that the STH capitulation dominated the sharpest declines.

LTH sell-offs are typical of a bull market and merely formed the backdrop to the eventual drop in price. However, it was STH capitulation and deleveraging that created the downward momentum.

What is Next for Bitcoin?

While STH capitulation might be behind BTC price decline, it is unclear whether Bitcoin will rebound. Some experts have already called the bottom at $94,000 and believe that the flagship asset is due for consolidation and resurgence.

Santiment also highlighted the increase in Bitcoin social dominance, noting that it was at a 4-month high. Historically, such price drops have been marked as a ‘market bottom’ and an indicator of price reversal.

However, market signals remain mixed. On one hand, analysts note that the Bitcoin Futures-Spot Basis has flipped negative. This signals a reduction in demand for leverage, indicating that traders are being cautious.

Still, buying power is returning to Binance with over $9 billion in stablecoins accumulated. This suggests that there could be a return in accumulation and increased volatility with massive capital waiting for entry.