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▲ Bitcoin (BTC)
Although Bitcoin (BTC) has recently rebounded, a considerable number of investors are still realizing losses on-chain. As the realized loss metric remains high despite the price increase, an analysis suggests that some investors are not confident in the sustainability of this rally and are exiting at lower loss intervals.
According to the cryptocurrency specialized media Bitcoinist on May 8, on-chain analytics firm Glassnode analyzed the flow of Bitcoin network's realized loss metric in its latest weekly report. The realized loss metric aggregates the total amount of losses confirmed by Bitcoin investors during transactions.
This metric is calculated by comparing the past transaction price of moved Bitcoin with its current transaction price. If a specific Bitcoin was previously transacted at a higher price and then moved at a lower price, that transaction is classified as a realized loss. Conversely, transactions that generate profit are reflected in the realized profit metric.
According to Glassnode charts, the 14-day simple moving average of Bitcoin's realized loss metric surged significantly during price drops in November last year and February this year. Such surges are not unusual, as price declines are often followed by panic selling from those who bought at the peak. However, what caught the market's attention recently was the renewed increase in the realized loss metric while Bitcoin's price was rising.
Bitcoinist explained that the current increase in this metric is not as large as past capitulation selling phases. However, the fact that selling to exit loss positions has increased alongside the price rebound suggests that investors may have low expectations for the rally's sustainability. The interpretation is that some holders chose to sell below their cost basis when an opportunity arose to reduce losses.
Currently, the realized loss amount is aggregated at $479 million per day. This is approximately 140% higher than the baseline of $200 million per day, which was typically observed during stable phases in this Bitcoin cycle. Glassnode explained that if this metric consistently compresses below $200 million per day, it could be a strong on-chain confirmation signal that selling exhaustion is occurring and the market is transitioning to a healthier demand regime.
As of the time of writing, Bitcoin was trading at approximately $80,100, having risen 5% over the past week. However, there was also a slight pullback from the recent high. While the price has rebounded, confirmed selling at a loss continues, indicating that the market has not yet fully confirmed the exhaustion of selling pressure.
The reliability of Bitcoin's next rebound depends on how quickly the realized loss metric decreases. If realized losses continue at the level of $479 million per day, selling pressure could repeatedly emerge during the rally. Conversely, if this metric falls below $200 million per day, stop-loss selling pressure would weaken, and the Bitcoin market could move into a more stable demand recovery phase.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. This content should be interpreted for informational purposes only.*
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