Some Bitcoin investors are selling while they can after the major cryptocurrency recovered $23,000 earlier this month, according to Glassnode.
The latest report from the blockchain intelligence provider reviews recent patterns of on-chain behavior exhibited by short-term and long-term holders.
Get out while they can
The newsletterreleased on Monday, begins by looking at Bitcoin’s price, which has picked up “several 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. After overcoming this pattern at $17,400, the average miner returned to a breakeven position.
The move also brought many people’s Bitcoin back into the profit zone, with the profit bid percentage dropping from 55% at $16,000 to 67% at $23,100. This was one of the sharpest spikes in Bitcoin profitability during a bear market that has ever happened.
Glassnode said movements in this metric can be useful in identifying when a market rally may be underway. That said, moves of this magnitude are also prompting Bitcoin holders who have returned to profit to start realizing some of their gains.
In particular, the percentage of short-term holders’ supply in earnings has returned above 97.5% – at which point investors “tend to seize the opportunity and break even or break even.” profit”.
“Given this substantial increase in profitability, the likelihood of selling pressure from short-term holders should increase accordingly,” Glassnode said.
The data already confirms this: trading volume between short-term Bitcoin holders (those whose coins were traded less than 6 months ago) has skyrocketed far beyond its long-term downward trend. term. Minorsalso, have sold in the rally.
“Therefore, the sustainability of the current rally can be seen as a balance between incoming demand and newly deployed demand, meeting the supply pulled from investors’ wallets by these higher prices,” Glassnode continued.
Long term holders
As short-term holders sell off, the number of coins that haven’t moved for more than 6 months is growing at a rate of 100,000 BTC per month. This means that HODLer’s conviction remains strong, even in the midst of a market rally.
At current prices, the average long-term holder is roughly breaking even, meaning their coins are at the same price at which they were purchased.
Last week, Glassnode Noted that Bitcoin’s volatility spike this month could signal the start of a cyclical bull market.
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