Bitcoin On Chain Analysis: Recent Selling Pressure From Short Term Owners

Bitcoin Magazine will be looking at Bitcoin’s on-chain (BTC) metrics, more specifically the Actual Profit / Loss Indicator (NRPL), to better estimate the size of the losses during the December 4th decline.

Actual Loss (RL)

Actual loss measures the value of all coins transferred at a price lower than the purchase price. Hence, it measures the total loss of all coins that were sold at a loss.

Since the uptrend began in March, actual losses hit an all-time high of $ 2.191 billion (black circle) on May 20. At that point, BTC fell from around $ 57,000 to $ 37,000.

Actual losses rose again on June 26th (blue circle) when BTC fell to $ 31,000.

However, since then the index has not risen too much as the BTC price has increased.

However, the price of BTC fell sharply on December 4th, moving from a high of nearly $ 60,000 just a week earlier to a low of $ 42,000.

As a result, the index rose to $ 1,233 billion (red circle), the third highest value to date.

The source: Glass knot

Actual Profit / Loss Indicator (NRPL)

The Real Net Profit / Loss indicator shows the net value of all trades in the market for a given day. If the coin moves at a lower price than its last UTXO, an actual loss will be recorded. If it is transferred at a higher price, the actual profit is recognized.

Therefore, to determine the overall position of the market, we subtract actual profit from actual loss.

This indicator provides results similar to the actual loss indicator as it shows three bearish spikes occurring on May 20th, June 26th and December 4th. The December 4th peak is the smallest of them.

In contrast to the actual loss indicator, however, the NRPL index hit a low on June 26th. This means that although on 20) that covered the above loss. Hence it has a lower total loss compared to 6/24.

Source: Glassnode

Who was selling?

Coin Days Destroyed (CDD) is an indicator that measures the number of days a coin has not been used prior to a transaction. Every day a coin remains unused, it adds up to a “coin day”. These accumulated “coin days” are then “destroyed” when the coins are spent.

Therefore, the CDD value is the total number of days the coin was destroyed in a given period of time.

However, the index did not rise throughout December 4th. This shows that the majority of coins sold were from short-term owners.

It also makes sense when considering the actual loss indicator, as short-term owners have bought BTC near the highs around $ 60,000.

Source: Glassnode

This is also confirmed by looking at the 1 day to 1 week spending indicator, which peaked on December 4th.

As a result, most of the coins that were sold at a loss on December 4th were purchased between November 27th and December 3rd.

Source: Glassnode

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