Bitcoin’s Struggle: Short-Term Investors Get Squeezed As Prices Fall Below Cost Basis

by

Ah, Bitcoin-the beloved, volatile creature that teases us all. After what can only be described as a week full of bearish despair, Bitcoin is, ever so slowly, trying to get back on its feet, inching toward the much-coveted $112,000 mark. But, alas, it seems that the short-term holders of this cryptic treasure are the ones paying the price, literally, as the price of Bitcoin dips below their precious Realized Price.

Realized Price Signals Pressure On New Bitcoin Investors

As Bitcoin’s Realized Price metric so graciously points out, it’s the short-term holders who are feeling the sting of the market downturn. Yes, those who just recently ventured into the crypto wilderness are now facing the bitter reality. It’s almost like buying a ticket to an amusement park only to find out the rollercoaster is under maintenance-except this one is more financially devastating.

On-chain data, courtesy of market guru Darkfost (who’s been kind enough to share his wisdom), shows that the new entrants to the Bitcoin world are very much underwater. With Bitcoin’s price dipping below the cost basis of short-term holders, those who bought during the recent rally are now watching their investments shrink. Let’s take a closer look-according to Darkfost’s report, the 1m-3m short-term holders are currently holding their breath at a cost basis of around $114,700. Bitcoin, however, is still trading below that, leaving them wading through red waters.

But wait, there’s a silver lining! For those who bought Bitcoin more than three months ago, their cost basis sits at a more comfortable $106,800. Now, with Bitcoin bouncing above the $111,000 mark, these seasoned investors are still in the green. Let’s just hope they’re not too smug about it, or the market will surely teach them a lesson!

Darkfost, ever the cautious optimist, believes that these older investors are effectively acting as a protective buffer. Their price range is holding steady, acting as a support point. But, let’s not get too comfortable. In previous market corrections, even this group of ‘veterans’ had to face the music. The market doesn’t care about your experience, folks. It’s a brutal, cold beast.

As the short-term holders sweat it out, Darkfost envisions two possible outcomes for the near future. On one hand, these investors might continue to defend their cost basis with all their might, establishing a strong support level and paving the way for a potential recovery. On the other hand, they might just give up for a while, giving the market a chance to gather itself and surge upwards once again. Either way, Darkfost predicts that these painful corrections are nearing their end. But remember-he’s not making any promises.

A Rise In Capitulation Amid The Crash

Meanwhile, Darkfost isn’t blind to the increasing capitulation taking place in the market. Ah, capitulation-the fancy word for when investors panic and start selling like there’s no tomorrow. According to Darkfost, the capitulation is escalating, which, in this context, is a necessary evil. It’s like cleaning out your closet, but instead of clothes, it’s the people with weak hands.

During the weekend, Bitcoin’s Realized losses (7-day MA) hit a staggering $750 million per day. Now, that’s some serious pocket change. In fact, this figure is one of the highest seen in this market cycle-higher than even the summer 2024 correction. We can only imagine the expressions on those poor investors’ faces. “Well, this wasn’t in the brochure…”

As the cycle rolls on, Darkfost urges us to keep an eye on these capitulation phases. Why? Because they often signal the local bottoms, as long as the bear market isn’t just getting started again. So, here’s to hoping we’re near the bottom of this rollercoaster. Grab your popcorn, folks.

Read More

2025-10-20 14:54