Bitcoin Bloodbath: 29% More Holders Dumping at a Loss—Time to Panic or Buy the Dip?

Red lights flash across crypto portfolios as Bitcoin's latest slump forces a grim milestone: nearly a third more holders are now selling at a loss compared to last quarter. Is this the capitulation before the rebound—or just the start of a deeper plunge?

The psychology of loss-cutting

When HODLers turn into sellers, markets pay attention. That 29% spike in loss-taking suggests either desperation or strategic tax harvesting (because nothing says 'financial planning' like panic-selling volatile assets).

Whale watching season

Keep an eye on large wallets—if they're quietly accumulating while retail bleeds out, history suggests a rally might be brewing. After all, someone's always getting rich during crashes (hint: it's rarely you).

The cynical take

Traditional finance bros are probably high-fiving over their 0.5% yield savings accounts right now. Meanwhile, crypto's proving again that getting rich quick mostly involves getting poor faster.

Fortune favors the patient

The Bitcoin market has entered a unique phase; one where patience is aggressively rewarded.

In previous cycles, both long-term and short-term holders shared in the upside, with STHs capturing up to 63% in profits even as LTHs peaked.

Source: X

This time, however, short-term participants are getting crushed. While LTH profit supply has risen to 75%, STH profits have plummeted to a mere 12%; a brutal divergence.

A tale of two buyers

Since the 10th of June, the number of bitcoin holders selling at a loss has surged nearly 29%, climbing from 74,000 to over 95,000. It’s clear that weak hands are tapping out.

But what adds nuance is that conviction buyers have also risen; a subtle indicator that not everyone is giving in to fear.

Source: Glassnode

Instead of running, some investors are seizing the downturn to lower their cost basis. The market may look bruised, but strategic repositioning is underway.

Capitulation and conviction are moving together, and only one side will come out on top.

Stronger hands will inherit the rally

What we’re witnessing is a classic shakeout. Bitcoin cycles often cleanse the market of weak hands before paving the way for a stronger, more resilient base.

As short-term sellers capitulate, long-term holders and conviction buyers are stepping in, making way for a more stable accumulation phase.

This, while painful in the short run, is essential for sustainable growth. Bitcoin has always rewarded patience, and this phase appears no different.