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Recent on-chain data from Glassnode shows a remarkable tendency in the present Bitcoin market: about three-quarters of all circulating Bitcoin has stayed unaltered for more than six months.
This information shows the increasing predominance of long-term holders, who seem to be using Bitcoin more as a store of wealth than as an asset for quick profits. These investors stick to their guns even if the value of cryptocurrencies dropped by 21% from its all-time high, maybe expecting further price spikes.
Bitcoin Investors Continue to Hold
Based on Glassnode’s hodl wave chart, which shows the time since Bitcoin was last exchanged, much of 2024’s about 74% of Bitcoin in circulation seems to have not changed hands for. This holding pattern suggests a change in investor behavior as many decide to keep their Bitcoin inactive maybe in expectation of long-term benefits. The limited availability for trade as these older coins remain off the market could cause prices to be pressured upward as demand keeps increasing.
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Short-Term Holders Face Bad Times
Not all Bitcoin owners, meantime, find themselves in such a good situation. On August 19, on-chain expert James Check pointed out a worrying tendency for short-term holders—those who have owned Bitcoin fewer than 155 days.
More than eighty percent of these holders are underwater, hence their Bitcoin was bought for more than the worth of the market right now. This situation reflects past market situations in 2018, 2019, and mid-2021, where many short-term holders panicked and sold their assets, therefore causing additional price falls.
Panic Sell?
According to Check’s study, a bearish trend could be started if these short-term holders start to panic sell, therefore aggravating the decline of the market. The Crypto Fear & Greed Index shows that the general market mood is still wary; it has dropped back into “fear” area and scored 28. Investors are clearly concerned as this level not seen since December 2022 reflects.
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Bitcoin’s price momentarily jumped beyond $60,000 over the weekend, fueling expectations of a continuous climb. These increases were fleeting, though; prices dropped to about $58,619 at the time of writing. The strong retreat emphasizes the volatility of the market and the uncertainty still hanging over the crypto scene.
The activities of long-term holders and short-term investors will be widely observed as the market negotiates these choppy seas. While the constancy of long-term holders points to a strong conviction in the future worth of Bitcoin, the vulnerability of short-term holders could expose a risk should market conditions worsen.
