Bitcoin surrenders abound – Data shows realized and unrealized losses at record highs

Three weeks removed from the FTX collapse, Bitcoin (BTC) analysts are combing through data to decipher whether more selling will continue or if a market bottom has been reached.

One thing miners, short-term and long-term owners have in common is that they are losing in the Bitcoin market right now.

According to chain analysis from Glassnode, the extent of both realized and unrealized losses among Bitcoin holders is one of the heaviest capitulation events in BTC’s history. Capitulation prevents all groups from the increasing number of bankruptcies and decreasing miner income.

Bitcoin’s realized losses are the fourth largest ever, while unrealized losses are increasing

November recorded $10.8 billion in 7-day realized losses for Bitcoin. The largest recorded realized loss in Bitcoin history is June 2022 when $19.8 billion was recorded. Such losses show that a large volume of Bitcoin has changed hands at discounted prices.

A popular crypto investment adage is “you can’t lose if you don’t sell.” Unrealized losses track the entire Bitcoin market versus total market capitalization. The unrealized loss of 56% in November 2022 is the largest in today’s bear market. In 2014-2015, unrealized losses reached an all-time high for Bitcoin holders at 86%. The current unrealized losses are the fourth largest in Bitcoin’s history.

According to Glassnode analysts:

“This metric recently peaked at 56%, which is the highest for this cycle, and is comparable to previous market bottoms.”

Block times decrease as Bitcoin miners struggle

Bitcoin investors are not the only group capitulating in the current market. Bitcoin miners are struggling to remain profitable with the depressed prices.

There it is. Hash Ribbon miner surrender confirmed. Triggered by the $10B FTX scam and subsequent collapse, Bitcoin miners are now going broke and the Hash Rate is on the decline. pic.twitter.com/TorX7PzrNu

— Charles Edwards (@caprioleio) 28 November 2022

Since Bitcoin miners are under pressure to remain financially viable, this affects the BTC mining hash rate. A decrease in Bitcoin’s hash rate slows down BTC transactions. According to the HashRate Index, block times reached over 11 minutes.

Bitcoin’s hashrate is dropping like a rock↘️

Bitcoin’s 7-day average hash rate is currently 236 EH/s, down 14% from its 274 EH/s ATH

Block times are slow as a result: 11 minutes and 12 seconds on average this epoch pic.twitter.com/ckxqEqOGqX

— HashrateIndex (@hashrateindex) 28 November 2022

Despite today’s challenges, analysts believe capitulation is healthy to start the next bull run. Glassnode notes:

“A consistent event that motivates the transition from a bear back to a bull market is the dramatic realization of losses, as investors give up and capitulate on a large scale.”

With so many groups currently in losses at this stage of the post-FTX collapse bear market, Bitcoin and overall market sentiment will need to improve to spur new money into a bull run. Without improved sentiment, the capitulation may not match previous Bitcoin cycles.