Recent data from Glassnode shows that about three-quarters of all circulating bitcoins have remained unaltered for more than six months. This points to the growing predominance of long-term holders, who appear to be viewing Bitcoin more as a store of value than an asset for quick profits.
Rise of Long-Term Holders
According to Glassnode’s hodl wave chart, much of 2024’s approximately 74% of Bitcoin in circulation has not changed hands. This holding pattern suggests a shift in investor behavior, with many choosing to keep their Bitcoin inactive, perhaps in anticipation of long-term benefits.
Short-Term Holders Facing Challenges
Not all Bitcoin owners find themselves in such a favorable situation. On August 19, on-chain analyst James Check noted that over 80% of short-term holders (those who have owned Bitcoin for fewer than 155 days) are underwater, meaning their Bitcoin was purchased for more than the current market value. This situation reflects past market conditions in 2018, 2019, and mid-2021, where many short-term holders panicked and sold their assets, causing additional price falls.
Market Risks
According to Check’s study, a bearish trend could be triggered if short-term holders begin to panic sell, exacerbating the market’s decline. The Crypto Fear & Greed Index shows that the general market sentiment remains cautious, having dropped back into the 'fear' zone with a score of 28. Over the weekend, Bitcoin’s price briefly jumped above $60,000, sparking hopes of a continued rise. However, these gains were short-lived as prices fell to approximately $58,619 at the time of writing. The strong retreat highlights the market’s volatility and the uncertainty still lingering over the crypto scene.
The actions of long-term holders and short-term investors will be closely watched as the market navigates these choppy waters. While the stability of long-term holders points to strong confidence in Bitcoin’s future value, the vulnerability of short-term holders could pose a risk if market conditions worsen.
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