Short-Term Holders Send $3B in Bitcoin to Exchanges at a Loss as Mideast Tensions Rise

• Bitcoin recorded back-to-back daily declines of 3.7% as tensions in the Middle East escalated.
• Short-term holders sent $3 billion worth of bitcoin to exchanges at a loss over the past two days. In the past two days, Sept. 30-Oct. 1, bitcoin (BTC) registered consecutive declines of 3.7% as geopolitical tensions ramped up in the Middle East, culminating in Iran’s 200 ballistic- missile attack on Israel on Tuesday.

With the largest cryptocurrency little changed on Wednesday, this year marks the worst-ever start to an October, a month that’s historically provided positive returns.

Bitcoin Daily Price Performance (Glassnode)One headwind comes from so-called short-term holders, which Glassnode defines as investors who have held bitcoin for less than 155 days. This is a group that tends to panic-sell when the BTC price drops below their cost basis. Glassnode data shows this cohort has bought roughly 100,000 bitcoin since Sept. 19, when bitcoin was trading at $62,000.

By Sept. 27, bitcoin had surged to above $66,000, and, as the chart shows, this group was buying aggressively as the price increased. However, they started dumping their holdings as the price started to fall.

Short Term Holder Supply (Glassnode)In the past two days, short-term holders have sent roughly 64,000 bitcoin to exchanges, the equivalent of $4 billion. Of that, some $3 billion was sent at a loss, meaning it was sent when the price was lower than the entity’s average on-chain acquisition price.

This is the highest amount of loss sent to exchanges by the group since Aug. 5, during the yen carry trade unwind, which saw $2.5 billion of losses sent in one day.

Long-term holders, on the other hand, seem to be holding their nerve. As a group, they sent just 100 bitcoin at a loss to exchanges over the same time frame.

Edited by Sheldon Reback.