Will BTC Investors Lose Again Amid Choppy Price Action?

Bitcoin has been in a price action rut for the past few weeks. The effects are now visible in investor behaviour. For the first time in weeks, the king coin led the bearishness and helped reverse the ongoing trend.

Bitcoin outflow

After recovering from a nearly month-long slump in outflows, aggregate net flows changed around mid-January, and assets began raising capital instead of losing it. After a good start, net flow turned back into outflow from the week ending March 11.

Usually it is Ethereum that is leading this outflow. In the past, while Bitcoin registered minimal inflows or minimal outflows, it managed to keep the overall MTD and YTD net flows positive. This week, however, the king’s mint took the lead, posting an outflow of nearly $70 million.

Bitcoin and Ethereum Combined Resulted in $119 Million Outflow | Source: CoinShares

Ethereum, while not registering outflows as high as Bitcoin, still rose – $50.6 million, resulting in $22.4 million outflows in March and more than $134 million in outflows in 2022.

However, with Bitcoin this could be seen as investors seemed tired of constantly observing losses every week. Inconsistent price patterns of 3-4 days of gain followed by another 3-4 days of price decline have caused the king coin to consolidate within the $44.6k and $37.6k range for nearly a month. Even rallies as high as 19% and 17.8% failed to break that pattern.

Bitcoin price action | Source: TradingView – Coin-Crypto

As a result, the net P/L fell back into the red zone twice within two weeks. On top of that, the supply in profit has decreased significantly and about 6.93 million BTC worth $268 billion is currently at a loss.

Bitcoin Profit/Loss Ratio | Source: Glassnode – Coin-Crypto

While declining vibrancy indicates that Bitcoin holders are still convinced of HODL and accumulating, it does not mean they are also willing to take losses. There have been instances where they have liquidated their positions such as during the January 23 – February 9 rally of 26%.

Bitcoin Vibrance | Source: Glassnode – Coin-Crypto

Going forward, these investors could continue HODLen, as making gains in this environment seems unlikely until BTC marks a significant rally.

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