Bitcoin hodlers 'under siege' at $42K as 30% of BTC supply flips from profit to loss
Bitcoin (BTC) hodlers face a crucial week in more ways than one as $42,000 rekindles a familiar battle.
As noted by on-chain analytics firm Glassnode on Monday, 30% of the BTC supply is now at a loss — historically, this has been a key number to defend for bulls.
Bitcoin's descent from $69,000 to current levels — at one point over 40% — is nothing unusual, but for long-term investors, there is a specific reason to hope that current support holds.
Looking back at historical price performance, Glassnode reveals that once 30% of the supply goes "underwater," price rebounds often occur.
"As the bears apply pressure to the in-profit cohort of holders, Bitcoin bulls are defending a historically significant level of the Percent of Supply in Profit metric," staff explained in the latest edition of its weekly newsletter, The Week Onchain, describing bulls as "under siege."
These were the post-Covid market crash in March 2020 and summer 2021, in the aftermath of the China mining crackdown. The 30% in-loss level resulted in an upside impulse move for spot price in both instances.
Continuing, Glassnode acknowledged that the same result is nonetheless far from guaranteed this time around.
"The reaction from this level will likely provide insight into the medium-term direction of the Bitcoin market," the newsletter continued.
Others were more optimistic, with fellow on-chain platform CryptoQuant expecting a bullish outcome.
"The bull run in July had just begun when it had previously risen to these levels. The bulls are aggressively preparing for the new run," a blog post argued about the profit-to-loss ratio.
Earlier, Cointelegraph reported on the continued steely resolve by both long-term holders (LTHs) and miners when it comes to preserving
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