Bitcoin hits lowest weekly close since August as short-term holders slip into losses

Bitcoin (BTC) fell below $75,000 on Tuesday, after recording its lowest weekly close since August as selling pressure pushed recent buyers into losses.

Short-term holders face mounting losses as Bitcoin continues to retreat

Short-term holders (STHs) are approaching their break-even levels, while realized losses have increased relative to profits, according to Monday’s Glassnode Market Pulse. The development suggests that investors who bought Bitcoin during its recent recovery are facing growing pressure as prices continue to fall.

Glassnode's profit and loss indicators show that the percentage of Bitcoin's circulating supply in profit declined by 3.8% over the past seven days to 60.6%.

Net Unrealized Profit/Loss (NUPL) also dropped to 1.1% from 3.4%, reflecting the sharp reduction in unrealized gains as Bitcoin's price declined. By Sunday, short-term holders had collectively slipped into a small unrealized loss.

Meanwhile, the realized profit-to-loss ratio fell to -0.63 from -0.21, indicating that investors were realizing substantially more losses than profits.

“Loss realization now clearly dominates, a sign of fear-driven selling, although the reading has not reached its low band,” Glassnode wrote.

Leverage remains elevated despite liquidations

Bitcoin's derivatives market also showed signs of stress, although the recent decline has not completely cleared leveraged positions.

Futures open interest decreased 1.1% over the past week to $37 billion from $37.4 billion. Glassnode attributed the reduction to position closures during Thursday's decline and another round of long liquidations on Sunday.

Despite the decline, open interest remains near the top of its historical range, suggesting considerable leverage is still present in the market.

Long-side funding payments also stayed above their upper historical band, though they fell 7.1% to $2.9 million from $3.1 million.

According to Glassnode, bullish traders continue to pay a substantial premium to maintain their perpetual futures positions despite Bitcoin's recent weakness. This indicates that leveraged positioning remains tilted toward the long side.

Options positioning also reflects growing caution among market participants.

“Options still price more turbulence than the market delivers, but the gap has narrowed sharply, so option buyers now pay a smaller premium over realized moves than last week,” Glassnode stated.

Spot demand fails to absorb selling pressure

Bitcoin's rapid decline to $75,000 reflected the absence of demand as the market faced renewed pressure. Spot cumulative volume delta (CVD) fell to -$91.8 million, compared with $6.6 million a week earlier. Spot trading volume, meanwhile, increased 13.3% to $6.4 billion, indicating elevated trading activity during the week's price swings.

US spot Bitcoin ETFs also recorded outflows on four out of five trading days, marking their largest weekly outflow total since early July.

Nevertheless, Glassnode observed that Bitcoin's price momentum recovered from below its lower historical band and ended the week slightly higher, despite the top crypto establishing a new low.

“Momentum stays weak, but it no longer confirms the decline, a sign that the selling has lost some of its force,” the report stated.

BTC is trading at $74,700, down 0.1% in the past 24 hours at the time of writing.