Market intelligence firm Glassnode says that Bitcoin (BTC) could soon face sell-side pressure from short-term holders (STHs) eager to cash in on the king crypto’s latest price uptick. In a new analytics report, Glassnode finds Bitcoin’s recent surge to $23,000 pushed 97.5% of its short-term holders into the green at one point during the week, […]
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The latest analysis by Glassnode suggests that the worst of the sell-offs could be concluded, but the market still needs time to recover.
“Extreme” demand at the $20,000 price point for Bitcoin (BTC) appears to have forced the coins back into the hands of investors who care less about price while creating a new realized price level.
In the latest The Week OnChain Newsletter published on Monday, Glassnode’s UkuriaOC pointed to “extreme demand” around the $20,000 region, noting that each psychological price level from $40,000 to $30,000 to $20,000 creates a new group of short-term holders (STHs).
The Glassnode analyst noted that much of the supply that new STHs bought during that drawdown has not been sold even though prices are significantly down. This may be due to less price-sensitive buyers or those who care more about Bitcoin fundamentals than investment gains, driving demand.
Between late April through June, the BTC price has fallen 55% from $40,000 to a low of about $18,100, according to CoinGecko.
Glassnode wrote that this suggests the newly-minted STHs are price insensitive buyers with more confidence in Bitcoin, adding that their conversion from a STH to a long-term holder (LTH), who does not sell for at least 155 days, would help confirm this:
“It would be constructive to see these STH held coins at the $40k-$50K level start to mature to LTH status over coming weeks, helping to bolster this argument.”
In this current bear market, confirmed LTHs have locked in nearly 400 days straight of yearly profitability, performing better than 30-day profitability.
This is nearly the same duration that LTHs experienced during the 2018 bear market. Glassnode wrote that this suggests losses are being locked in by LTHs which, if the previous argument holds, means that the new buyers have less price sensitivity than the cohort who sold, meaning they could become the newest group of LTHs.
Another point of note in the report is that “unprecedented forced selling” from crypto companies amid mass liquidations and bankruptcies created conditions ripe for a relief pump.
Related: The battle between crypto bulls and bears shows hope for the future
The report concludes by stating that while the “worst of the capitulation may be over,” BTC could remain in this low range for some time as the cost basis for new coin buyers has diverged below the realized price for only about 17 days straight. Previous bear cycles have endured low divergences between 248 and 575 days.
BTC has retreated 3.1% over the past 24 hours to trade at $21,146 at the time of writing.
Crypto analytics firm Glassnode finds that over half a million Bitcoin (BTC) were sold at a loss as panic sweeps across the digital asset landscape. In a new detailed analysis, Glassnode says that over a three-day period, Bitcoin sellers racked up more than $7.32 billion in losses as they scurried to the exits while unloading […]
The post Bitcoin Investors Lock in Over $7,325,000,000 in Losses Amid Three Days of Deep Capitulation: Glassnode appeared first on The Daily Hodl.
Although long-term coin selling saw a marked increase last week, HODLing is still the preferred strategy as more of the short-term supply is becoming long-term supply.
Over the past week, long-term holders of Bitcoin increased their spending to a level that suggests de-risking from the market, but hodling remains the predominant investing strategy.
Uncertain macroeconomic headwinds are likely to have precipitated the increase in the sell-offs last week by long-term holders and shaken some short-term holders out of their positions according to data from blockchain analytics firm Glassnode. Last week, coins older than six months accounted for 5% of total spending, which is a level not seen since last November.
Short-term holders (STH) who have held coins for less than 155 days continue to decline in number, but not necessarily due to selling. Glassnode suggests that while it is generally more common for STH to sell, the recent decline in STH supply “can only occur when large portions of the coin supply are dormant and crossing the 155-day age threshold, becoming Long-Term Holder supply.”
Bitcoin (BTC) accumulation patterns do not suggest bear market behaviors yet as overall sell pressure remains consistent. Also, more than 75% of the BTC circulating supply has been dormant for at least six months despite the recent uptick in selling. Glassnode says this is an indication that investors are still predominantly hodlers.
Glassnode noted that the sell-offs have been into a relatively strong market that has avoided any significant moves up or down and has remained range-bound for most of this yea. This is thought to be staving off a capitulation event which often comes at the end of a bear cycle. There has not been a significant capitulation since last May when BTC price crashed from $58,771 to $34,977 over the course of a 15-day period according to CoinGecko.
The period from the May capitulation event until October marked the last time BTC accumulation resembled bear market behavior.
The profit/loss ratio of STH supply is still near the all-time low set in mid-2021. Currently, 82% of STH coins are being held at a loss which Glassnode states is an indication of the later stage of a bear market when savvy investors send their coins to cold storage to lie in wait for the return to positive profit margins.
Related: BTC price struggles below $39K ahead of expected interest rate hike by the Fed
As noted in last week’s BTC market update, exchange outflows remain quite high. Coinbase saw its largest outflows in nearly five years last week with 31,130 BTC leaving the exchange. These outflows illustrate Bitcoin’s increasing reputation as a must-have in a modern investor’s portfolio, and a further reluctance to liquidate in a hurry.
The current bearish price action of Bitcoin (BTC) looks different from BTC’s May collapse in a number of key ways, according to on-chain analyst Will Clemente. Clemente tells his 470,600 Twitter followers that “strong hands,” meaning entities who historically take in and hold more than 75% of their BTC, are currently buying from “weak hands,” […]
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