Bitcoin (BTC) latest price rally has triggered profit taking, their daily realized gains stands at around $2 billion. However, not all investors are interested in liquidating their assets at the moment.
Taking a second look at the data, there is a clear separation of the long-term holders of Bitcoin and the short-term ones.
Increased profit taking has increased with Bitcoin’s price rise to almost its record high price of $100,000.
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As per data from blockchain analytics firm Glassnode’s “The Week Onchain,” $443 million in profits were realized across the Bitcoin holder spectrum on Nov. 22.
However, as can be seen from these above figures, there are clearly signs of substantial selling pressures and indeed these profits depict a clearer picture of the market situation.
Among these, coins with the holding period of between 6-12 months contributed to 35.3% of the total sell activity, highlighting that novel investors are dominant in selling.
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Long-Term Bitcoin Holders Show Restraint
The ‘long term holders’, more popularly known as the ‘diamond hands’ have remained balanced during this particular run-up. In its latest report, Glassnode shows that these former holders are mostly patient with their coins, implying they expect even higher Bitcoin price.
“More seasoned investors remain steadfast, refraining from selling en masse,” the report noted. This sentiment is backed by a sharp divergence between short-term and long-term holder activity.
Coins held for over a year saw relatively minimal profit-taking compared to those acquired more recently, particularly in the wake of the U.S. spot Bitcoin ETF approvals.
The introduction of U.S. spot Bitcoin ETFs has played a pivotal role in attracting new market participants. However, these funds have also shown significant sensitivity to Bitcoin price fluctuations.
Over just two trading days, ETFs recorded net outflows exceeding $550 million, according to Farside Investors, coinciding with BTC/USD falling from $99,000 to $90,800.
Institutional investors, including those behind ETFs, appear to be more reactive to short-term price movements than traditional long-term Bitcoin proponents.
This volatility is reflected in the performance of MicroStrategy, the company with the largest corporate Bitcoin holdings. After peaking on Nov. 21, its stock dropped 35% in a record four-day losing streak, even as it continued to expand its Bitcoin reserves.
A Split Market Narrative For Bitcoin Price
The current market environment paints a tale of two Bitcoin cohorts: one taking profits and the other waiting for potentially higher prices. While newer investors seized the opportunity to lock in gains, long-term holders’ restraint underscores their confidence in Bitcoin’s long-term value.
As Glassnode observed,
“The dominance of coins aged 6 months to 1 year highlights that the majority of spending originates from newer entrants to the market.”
Meanwhile, seasoned Bitcoin veterans continue to play the long game, solidifying their reputation as the cornerstone of market stability.
Bitcoin’s near-record price action has reignited debate around profit-taking strategies and market resilience. While $2 billion in daily profits showcases the potential for quick gains, it also reveals the contrasting approaches of Bitcoin’s old guard and its newer adopters.
Whether this rally is a precursor to even greater heights or a signal for caution, one thing remains clear: Bitcoin price continues to captivate both seasoned investors and fresh entrants alike.
