Net profit/loss data made by short-term investors in the Bitcoin market showed some recovery after a serious wave of losses in the past few days. The seven-day moving average, which tracks short-term investor behavior, had risen to a daily loss of about $1.24 billion on Feb. 6. According to the latest measurements, this amount was around 480 million dollars.
Severe Increase in Losses and Partial Balance
This sharp increase in losses marked one of the sharpest selling pressures of the current market cycle. Data from crypto analysis firm Glassnode shows that losses at this level occur during periods when new investors close their positions under intense pressure. Following a daily loss of $1.24 billion, the partial decrease in losses indicates that compulsory sales are slowing down. However, the fact that the figures still remain in the seriously negative zone stands out as an indicator that investors continue to realize losses instead of profits.
Market Structure and the Role of Short-Term Investors
Short-term investors are generally known as the most sensitive and quick-reacting group in the market. When they incur significant losses overall, it appears that this creates a widespread mood of stress and give-up throughout the market. In the current situation, it is stated that short-term investors have recorded losses in total and the severity of this has temporarily decreased.
It was observed that this process overlapped with the base formation phases in previous market cycles. In other words, periods of losses of this magnitude generally coincide with the end of correction periods rather than the propagation phase.
Base Formation Still Continues
Although sharp sales have slowed down, the fact that net profit/loss data is still negative indicates that the base formation process has not ended. Unless there is a meaningful change in investor behavior, it does not seem possible to talk about a sign of recovery in the market. Historically, base formation is not finished when losses first rise; Essentially, the selling pressure needs to decrease significantly and the losses need to decrease significantly.
Current data shows that the pressure on the market is still not completely over and the tendency for those who have recently purchased to exit at a loss continues. This dynamic stands out as a pattern that is generally observed in the advanced phases of the correction process. However, these data do not currently provide a clear signal that a recovery momentum is occurring in the market.
In Glassnode’s analysis, it is stated that “Short-term investors continue to realize losses in total and the impact of this is gradually easing.”
This provides an important impression of how the behavior patterns in the market are affected in periods when prices change significantly or large fluctuations occur. Similar selling waves generally concentrate in phases when volatility increases and new investors abandon their positions in the short term.
As a result, the tendency for short-term investors to realize losses in the Bitcoin market still continues. Despite some improvements in the net profit/loss ratio, basic indicators do not yet point to a completely positive picture.
