HODLers Are ‘In the Money’ Despite Bitcoin’s Drop to Six-Month Lows

A majority of bitcoin holders are making money on their investments despite the cryptocurrency’s drop to six-month lows. 
The top cryptocurrency fell to $6,968 during European trading hours Friday – the lowest level in six months, according to CoinDesk’s Bitcoin Price Index. Currently, the cryptocurrency is changing hands around $7,100, a 48 percent drop from highs above $13,800 seen in June. 
Despite the sharp drop, 15.31 million or 54 percent of bitcoin addresses are still “in the money,” according to blockchain intelligence firm IntoTheBlock
An address is said to be "in the money" if the current price of bitcoin is higher than the average price at which coins were acquired or sent to an address. 
The on-chain metric, therefore, indicates the majority of holders have acquired coins below the current price of $7,100.
A closer look at the chart above shared by IntoTheBlock's CTO Jesus Rodriguez shows most of the in-the-money addresses have purchased bitcoins in the range of $900 to $4,180. A significant number of addresses appear to have purchased at an average cost in the $4,180-$6,631 range. 
After all, BTC has traded above $10,000 for only nine months in its lifetime. Further, the cryptocurrency broke above $6,600 in October 2017 – eight years after its creation. 
Hence, it's no surprise that the majority of addresses are still able to sell at a gain. A few of them may have acquired coins during the fourth quarter of 2018 and the first quarter of 2019 when the cryptocurrency was trading in the range of $4,180-$6,631.
The chart also shows that 1.03 million addresses have acquired bitcoins in the range of $6,631 to $7,354. With prices trading near $7,000, a few of them are already out of the money, meaning they would take a loss if they sold now. If the sell-off continues, these addresses may panic and attempt to liquidate their bitcoins, leading to a deeper drop. 
That said, BTC is currently far from capitulation – the point of time when investors attempt to exit an investment or market so quickly that they are willing to surrender any and all gains to do so. The panic selling ends up exaggerating the price drop and is widely considered the final stage of a bear market. 
This is due to the fact that the average cost of most in-the-money addresses is below $4,100, as noted above. These addresses would become at-the-money and may start offering bitcoins in the event prices drop below $4,100 over the coming months.