Certain Bitcoin investors are selling while they can after the top cryptocurrency rallied $23,000 earlier this month, according to Glassnode.
The latest report from the blockchain intelligence provider reviews recent on-chain behavior patterns exhibited by holders in both the short and long term.
get out while you can
He NewsletterPosted Monday, it begins by examining the price of Bitcoin, which has claimed “multiple on-chain pricing models.”
One model includes the investor price, which reflects the average acquisition price of all coins spent and distributed by Bitcoin miners. Having beaten this model by $17,400, the average miner has returned to a profitable position.
The move has also brought many people’s Bitcoin back into the profit zone, with the supply percentage in profit rising from 55% at $16,000 to 67% at $23,100. This was one of the sharpest spikes for Bitcoin profitability during a bear market that has ever occurred.
Glassnode stated that movements in this metric can be helpful in identifying when a market rally may be underway. That being said, moves of this size also incentivize Bitcoin holders who have returned to profit to start taking some of their gains.
In particular, the Short-Term Holders Bid Percentage in Earnings has returned to above 97.5%, at which point investors “tend to seize the opportunity and exit at breakeven or with earnings.”
“Given this substantial increase in profitability, the likelihood of selling pressure coming from short-term holders is likely to grow accordingly,” Glassnode said.
The data already bears this out: trading volume among short-term Bitcoin holders (those whose currencies last moved less than 6 months ago) has skyrocketed well beyond its long-term downtrend. minersAlso, they have been sold to the rally.
“Therefore, the sustainability of the current rally can be seen as a balance between incoming and newly implemented demand, meeting the supply drawn from investor wallets by these higher prices,” Glassnode continued.
long-term holders
While short-term holders are selling out, the number of coins that have not moved for more than 6 months is growing at a rate of 100,000 BTC per month. That means HODLer conviction remains strong, even in the midst of a market rally.
At current prices, the average long-term holder is roughly at breakeven, which means that his coins are at the same price at which he bought them.
Last week, Glassnode indicated that increased volatility for Bitcoin this month could signal the start of a cyclical bull market.
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