1. First, you should understand thatthe Bitcoin Long/Short-Term Holder Supply Ratio had been moving ina bearish trajectory recently,trading around$5670
The analysis of on-chain data indicates that the proportion between long-term and short-term Bitcoin holders is shaping a pattern typically associated with shifts from bullish to bearish market phases
Bitcoin Long/Short-Term Holder Supply Ratio Has Spiked Recently
According to Glassnode’s latest weekly report, there has been a significant increase in the Long-term/Short-term Holder Supply Ratio. This ratio is crucial as it distinguishes between two primary groups within the Bitcoin community: those who hold their Bitcoins for short periods (Short-Term Holders or STHs) and those who hold them for extended timeframes (Long-Term Holders or LTHs)
To make this explanation more accessible and engaging, consider rephrasing it as follows:
Over time, it’s typically found that investors tend to hang on to their investments for longer periods, reducing their likelihood of selling them. Consequently, Long-Term Holders (LTHs) exhibit a steadfastness or resilience compared to Short-Term Holders (STHs) in the market
Regardless of its robustness, the surge in the cryptocurrency’s price towards a fresh record high earlier this year was compelling enough for even the most patient investors to consider cashing out
A method for monitoring the actions of these groups could involve observing the total Bitcoin holdings within the wallet balances of its participants
The chart below shows the trend in the ratio between this supply for the LTHs and the STHs over the past decade.
In simpler terms, your graph was showing a decline earlier this year and it seems you were referring to a period of reduced sales for the rally. Enjoy your new purchases!
While this showed that the resolve of these HODLers had wavered, the trend is not something new that has occurred in this cycle. The chart shows that the ratio had also seen a similar decline during the 2017 and 2021 bull runs.
Recently, as BTC’s consolidation has lengthened, the indicator has shown a rebound, suggesting the supply share of the LTHs has resumed an upward trajectory.
To clarify, this growth isn’t indicating that the Short-Term Holders (STHs) are actively purchasing supplies from Long-Term Holders (LTHs). Instead, since coins can only be categorized within this group after surpassing the 155-day threshold, the increase in the ratio suggests that some STHs have been maturing into the cohort over time
It looks like I’m getting back to the stock market. However, the report mentions “historically, examples of LTH supply have tended to increase like this shows it usually occurs during a transition towards a bear market.”
Indeed, the key term to focus on is “typically,” as exceptions do occur as well. The question now is: What direction might Bitcoin take moving forward based on this trend in the Long/Short-Term Holder Supply Ratio?
BTC Price
Bitcoin has been gradually moving in a bearish trajectory recently, trading around $56,700.
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2024-09-05 19:15