The spending of long-term Bitcoin holders has increased to a point that suggests de-risking, but hodling continues to be the dominant investing strategy.
According to data from Glassnode, uncertain macroeconomic headwinds may have triggered the sale-offs by long-term holders last week and shaken some short term holders out of their positions. The last week saw coins older than six-months account for 5% of total expenditure, a level that has not been seen since November 2017.
STH, short-term holders of coins who hold them for less than 155 day, continue to see a decline in their numbers. However this is not always due to selling. Glassnode says that although it is more common for STH holders to sell, the decline in STH supply has been caused by large amounts of coins being dormant, crossing the threshold of 155 days, and becoming Long-Term Holder supply.
Although accumulation patterns of Bitcoin (BTC), do not indicate bear market behavior, overall sell pressure remains constant. Even with the recent increase in selling, 75% of Bitcoin’s circulating supply remains dormant for more than six months. Glassnode believes this indicates that investors are still primarily hodlers.
Last week, long-term Bitcoin owners saw an increase in sales. Glassnode
Glassnode pointed out that the sell-offs were into a relatively strong and stable market that has not seen any major moves up or down. It has also remained range bound for most of the year. This could be preventing a capitulation, which is often at the end a bear market. According to CoinGecko, there has been no significant capitulation since May last year when BTC prices plummeted from $58,771 down to $34,977 in a period of 15 days.
Between the May capitulation and October, the last time BTC accumulation was a bear market period was in October.
BTC accumulation patterns remain above bear market trends. Glassnode
STH supply’s profit/loss ratio is still at an all-time low of 82% in mid-2021. 82% of STH coin are currently being held at loss. This is Glassnode’s indication that the bear market has entered the final stage. Smart investors will send their coins into cold storage to wait for the return of positive profit margins.
Short-term investors are suffering near-record losses. Glassnode
Related: BTC price drops below $39K ahead Fed expected interest rate rise
Last week’s BTC Market Update noted that exchange outflows are still very high. Coinbase experienced its largest outflow in almost five years last week, with 31,130 BTC leaving it. These outflows are a sign of Bitcoin’s growing reputation as an investment asset and a reluctance for investors to liquidate quickly.
Eileen Wilson –Technology and Energy
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