Long-term Bitcoin investors are increasing their selling pressure on the market, at a time when the king coin is experiencing a strong correction in the past few days.
Long-term holders have sold 1 million Bit from September. Image: TradingView
Since September, long-term Bitcoin investors (long-term holder - LTH) have sold more than 1 million BTC, according to a summary by CoinDesk.
This coincides with the time when Bit decreased sharply, currently at the furthest range from the all-time high since the US Presidential election in early November. Specifically, the price of Bit is trading 13% lower than the 108,000 USD peak.
In recent times, the price of BTC has usually corrected with an amplitude of 10% from the peak. The selling pressure from LTHs seems to be contributing to "deepening" this downward trend.
Bit's volatility range in the recent strong corrections. Screenshot from Tradingview
Glassnode defines LTH as investors who have held Bit for at least 155 days. This group usually tends to buy when the price is low and sell when the price rises. In the past few weeks, LTHs have distributed a significant amount of BTC, reducing the total coin holdings from around 14.2 million BTC in mid-September to 13.2 million BTC.
Particularly, the day before yesterday (12/19), LTHs sold nearly 70,000 BTC. This is the 4th largest single-day sell-off of the year, based on data from Glassnode.
Actions of LTHs and STHs. Source: Glassnode
On the other hand, the main buyers in the market are the short-term holders (STHs), those who own Bit in the short-term. During the same period, STHs have bought around 1.3 million BTC, not only absorbing the BTC from LTHs but even more than that.
In recent days, the market landscape has changed as LTHs have sold more than the amount bought by STHs. This imbalance in supply and demand has caused the price of Bit to plummet, currently only around 94,500 USD per coin.
Bit supply dynamics. Source: Glassnode
In addition, out of the total 19.8 million BTC in circulation, only about 2.8 million BTC are held on exchanges. The amount of Bit on exchanges has decreased by about 200,000 BTC in the past few months, indicating a shift of assets away from trading platforms.
The behavior of the LTH and STH groups will be a powerful determining factor for the price of Bit in the coming time. As the selling pressure from LTHs increases and the supply on exchanges continues to decline, investors need to be cautious about unexpected volatility in the market.
In addition to the pressure from LTHs, the hawkish stance of the Fed on the prospect of interest rate cuts is also a concern for the market. Chairman Powell also emphasized that the Fed is not allowed to hold Bit, indicating the cautious stance of this agency towards the cryptocurrency market.
Compiled by Coin68
