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Investors who have held Bitcoin for a longer period of time are now selling it to secure immediate profits, according to Glassnode.
The on-chain intelligence platform has studied the Bitcoin entities and the offer they hold in their wallets. He then split the result into two categories: long-term owners and short-term owners.
As Glassnode explained, Long-Term Holders, or LTH, are those wallets that have held Bitcoin for more than 155 consecutive days. Similarly, short-term holders (STH) refer to those wallets that have transferred their Bitcoin tokens to other addresses within the first 154 days of purchase.
The weighting factors, used for the classification of long-term and short-term holders. Source: Glassnode
The platform compared the readings of LTH and STH, finding that the former’s supply plummeted to 12.3 million BTC on November 19 from 12.6 million BTC on October 23. On the other hand, STH’s offering has increased, showing that serious investors are selling off their holdings to secure earnings.
Not bearish
A sell-off exercise by long-term investors did not put any negative pressure on the Bitcoin market. Surprisingly, it turned bullish for the cryptocurrency.
Long-Term Holder (LTH) Bitcoin offer versus price. Source: Glassnode
Glassnode sketched the LTH offering on the Bitcoin price chart to understand their correlation. The platform found that changes in the former affected the latter in reverse. That said, when the supply of LTH increases, the price of Bitcoin goes down. Conversely, when it falls, the cryptocurrency begins a bull run.
“Currently, we are seeing a peak to the downside, indicating the fact that hodlers’ BTC has started to move on chain, as a reaction to the recent price appreciation,” Glassnode said. “Note that this has also been commonly seen in previous cycles and indicates that we are potentially in the early stages of a bull run.”
Meanwhile, the price of Bitcoin appreciates as STH’s supply rises. According to Glassnode, it’s a clear indication of old cryptocurrency deposits being reactivated in bull markets for trading.
“Currently, 12 million BTC of the LTH supply (~ 97%) and 3.5 million of the STH supply (~ 97%) are in a profitable state,” the company added.
Bitcoin Outlook
The Glassnode study comes when the price of Bitcoin hit a three-year high near $ 18,000. It represents nearly 147% over a span of time since the start of the year, driven by a depreciation of the US dollar due to the Federal Reserve’s ultra-low interest rate and endless bond buying policies.
Analysts expect the BTC / USD exchange rate to rise again towards its all-time high near $ 20,000. It is because Bitcoin is more scarce, divisible and easily transferable. This technically makes the cryptocurrency superior to gold, a $ 9 trillion hedging asset.
“Where gold is an ancient store of value, Bitcoin it is a * nascent * store of value with monetary properties superior to gold “, She said Vijay Boyapati, a leading cryptocurrency researcher.
“If it were to be believed that it outshines the market capitalization of gold, due to these superior properties, Bitcoin it becomes a very interesting asymmetric bet, “he added.
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