Short-Term Bitcoin Buyers Transition to Long-Term Holders: Glassnode

Over the past week, long-term Bitcoin holders have increased their spending to a level that suggests de-risking the market, but hodling remains the predominant investment strategy.

Uncertain macroeconomic headwinds likely precipitated the surge in selling last week by long-term holders and jolted 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, a level not seen since last November.

Short-term (STH) holders who have held coins for less than 155 days continue to decrease in number, but not necessarily due to selling. Glassnode suggests that while it is generally more common to sell STH, the recent decline in STH supply “can only occur when large portions of the coin supply are dormant and cross the 155-day age limit, making it a long-term supply.” -Term Holder”.

Bitcoin (BTC) accumulation patterns do not yet suggest bearish market behaviors as overall selling pressure remains consistent. Furthermore, over 75% of the circulating supply of BTC has been idle for at least six months, despite the recent surge in sales. Glassnode says this is an indication that investors are still predominantly hodlers.

Long-term Bitcoin holders have increased sales in the past week. – Glassnode

Glassnode noted that sales took place in a relatively strong market that avoided any significant up or down moves and remained limited for most of this year. This is believed to be preventing a capitulation event that usually occurs at the end of a bearish cycle. There has not been a significant capitulation since last May, when the price of BTC dropped from $58,771 to $34,977 over a 15-day period, according to CoinGecko.

The May through October capitulation event period marked the last time that BTC accumulation resembled bear market behavior.

BTC accumulation patterns are still above bear market trends. – Glassnode

The STH supply profit/loss ratio is still close to the all-time low set in mid-2021. Currently, 82% of STH coins are being held at a loss, which Glassnode says is an indication of the later stage of a bear market, when savvy investors send their coins to cold storage to wait for positive profit margins to return.

Short-term holders are at near-record losses. – Glassnode

Related: BTC price is below $39,000 ahead of the Fed’s expected interest rate hike

As noted in last week’s BTC market update, exchange outflows remain quite high. Coinbase saw its biggest outflows in nearly five years last week, with 31,130 BTC leaving the exchange. These exits illustrate Bitcoin’s growing reputation as a must-have item in a modern investor’s portfolio and an added reluctance to liquidate in a hurry.