Recently, short-term investors who have been holding BTC for 1 to 3 months in the Bitcoin market are facing the biggest unrealized losses of the current cycle. It is known that this group consists mostly of individual investors and stands out as an important indicator for monitoring the short-term trends of the market.
What Do Profit/Loss Data Show?
In the on-chain analysis, it is seen that short-term investors have serious losses compared to the average costs of their positions. The blue area in the charts shows the current profit-loss margin for this audience. Above zero indicates a profit, while below zero indicates a loss for investors. In the last period, this blue area has turned significantly negative.
Historical Losses and Comparative Analysis
The period highlighted by a red box on the right side of the chart reveals that short-term investors have entered the deepest negative territory in the last cycle. According to this table, many short-term buyers seem to have suffered serious losses. In the past, negative profit-loss ratios of similar depth have generally been seen in the final phase of market corrections, that is, during corrections rather than a new long-term decline.
Current data shows that there is a correction movement, especially in a situation similar to the November 2019 period. At that time, short-term investors suffered high losses, but this movement was followed by a harsh and long-term bull market.
Exit for Individual Investors, Purchase for Large Investors
On-chain movements show that individual investors exited the market and abandoned their positions despite their losses. On the other hand, large-scale investors – that is, actors called “whales” in the market literature – tend to use the decline in prices for new purchases.
This attitude points to a familiar dynamic in market corrections. While retail investors are losing positions in the ongoing pressure, larger players are turning to buying at relatively low levels. In such periods, the weak hands of the market are eliminated and the leverage balance is reset.
Correction or Bear Market?
The main idea highlighted in the charts is that heavy losses are mostly concentrated on short-term investors and this is a sign of an intra-market correction, not a structural decline. Negative profit and loss data of similar depth mostly occur within broad uptrends.
Although these intense losses in the short term do not clearly mean a transition to a bull or bear market, they provide data on market stress and short-term selling pressure. How such periods will end will be determined by liquidity conditions, macro factors and the general demand situation of the market.
