Foreign media outlets believe that approximately 40% of Bitcoin holdings are currently experiencing unrealized losses, but this figure alone is insufficient to conclude that the market is repeating the deep bear market of 2022. The more pressing question is whether long-term holders will maintain their positions rather than engaging in a concentrated sell-off as they did in the previous downtrend.
The percentage of unrealized losses does not necessarily indicate a bear market.
The article states that although Bitcoin has recently retreated, its trend is significantly different from that of the second quarter of 2022. According to the article, BTC has maintained an upward trend so far this quarter, while it experienced a sharp decline during the same period in 2022.
Some analysts believe the market's interpretation of the "40% unrealized loss" is exaggerated. One reason is that a significant portion of these unrealized losses may have come from investors in US-based Bitcoin ETFs. The average cost basis for these funds is around $83,400, and against the backdrop of persistent inflationary pressures and recurring expectations of interest rate cuts, their paper losses have widened.
Long-term holders' supply hit a record high
The article mentions that the supply from long-term holders has risen to an all-time high of 15.8 million BTC. This change is seen as a significant difference between the current market and that of 2022.
The previous decline was accompanied by a broader loss of confidence, with both short-term and long-term holders continuously selling. In contrast, during this round of correction, long-term holders did not significantly turn to selling; instead, they continued to increase their holdings. Based on this, the article argues that the current pressure on Bitcoin is more likely institutional selling pressure and external factors, rather than a synchronized collapse in market confidence.
- The supply of long-term holders is approximately 15.8 million BTC.
- The percentage of positions with unrealized losses is approximately 40%.
- The funding cost for some ETFs is approximately $83,400.
Regulatory expectations are starting to cool down.
However, the article also points out that whether this divergence can continue for the remainder of the year remains to be seen. In recent months, part of Bitcoin's resilience stemmed from market expectations of improved US cryptocurrency regulations, but this narrative has cooled somewhat recently.
Following the Securities and Exchange Commission's withdrawal of the "innovation exemption" for tokenized stocks, market predictions have significantly lowered their expectations for the passage of the CLARITY Act. Meanwhile, Senator Cynthia Lummis warned that if Congress misses the current legislative window, the bill may not reappear on the agenda until around 2030.
With regulatory progress slowing and the interest rate path remaining unclear, the two main supports the market was previously betting on are weakening. The article argues that if long-term holders' confidence begins to waver, market speculation about 2022 could reignite.
