Long-Term BTC Holders Capitulating at Unprecedented Rate; MicroStrategy Discloses Balance Sheet

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Chart of the Day

On Wednesday, the broader crypto market continued its downward spiral as investors are nervously awaiting the U.S. central bank's decision with regard to another half-point rate hike this month. As of the time of writing, BTC is hovering near the $38k support level after shedding 1.15% of its market value in the last 24 hours. The largest cryptocurrency by market cap has been struggling to print any bullish patterns on its multi-timeframe charts, and is looking odds on to suffer a further pullback due to rising volatility.

On the on-chain front, several key on-chain metrics reveal that many short-term and long-term BTC holders have now been put underwater by significant unrealized losses. In particular, long-term BTC holders are capitulating at an unprecedented rate. Meanwhile, the long-term holder spent price is also fast approaching the spot price, as new entrants to the long-term holder cohort are now becoming increasingly wary of further downside price actions.

In a similar vein to BTC, a bearish pattern appears to be forming on ETH's hourly chart. The second-largest cryptocurrency has plunged below the $2,800 level after posting a 1.7% loss from 24 hours ago. Most major altcoins are also in the red. This is with the exception of NEAR and CRO, with both tokens going up by 2% in the last 24 hours.

Talk of the Town

MicroStrategy, a software firm with more than 129K of BTC in its holdings, recently disclosed its balance sheet for Q1 2022. The financial figures reveal that the company is facing a non-cash digital asset impairment of $170 million, up from $146.6 million in Q4 of last year. This impairment reflects the weakening BTC spot price amidst the deteriorating global macroeconomic conditions. In its earnings report release, the company highlighted a BTC-backed loan deal with Silvergate, and hinted at the possibility of pursuing yield-generating deals of a similar nature in the future.

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