Short-term Bitcoin investors face pain, triggering panic selling worries

Bitcoin (BTC) short-term holders are experiencing the largest amount of unrealized loss since the bear market lows in 2022, which has added more pressure on prices due to fears of another sell-off, according to the latest edition of the “Bitfinex Alpha” report.

The Short-Term Holder MVRV (Market Value to Realised Value) ratio compares the current market price of BTC to the price at which coins were last moved on the blockchain. 

The report highlighted that when the MVRV ratio is below one point, as it is currently, it indicates that short-term holders would sell at a loss if they decided to liquidate their positions. This situation increases the likelihood of selling pressure in a bearish market.

Bearish on-chain data

Bitcoin’s price has fallen 33% from its all-time high of $73,666, marking the largest such decline of this cycle. The Mayer Multiple, which compares the current Bitcoin price to its 200-day moving average (200 MA), dropped to 0.88, its lowest level since the FTX collapse in November 2022.

The Mayer Multiple is an important metric for evaluating the severity of Bitcoin price movements, as it utilizes the 200 MA, which is a key metric for traders.

According to the report:

“This decline in the Mayer Multiple to such a low figure highlights a pronounced bearish phase in the market, suggesting that bitcoin was trading well below its average historical price trend. This metric is especially useful for investors to understand the extent of the deviation from typical market conditions and to assess potential buy or sell signals based on historical patterns.”

The Short-Term Holder Realized Price (STH Cost-Basis) currently stands at $64,860, representing the average purchase price for investors who have held their coins for 155 days or less. 

Recently, Bitcoin’s spot price approached one standard deviation below this level, a rare occurrence that has only happened in 7.1% of trading days.

This deviation highlights the intensity of the recent market downturn and indicates significant stress among newer market participants. Thus, it is important to gauge the negative sentiment in the crypto market.

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