Glassnode Reveals Bitcoin’s Holder Behavior: Short-Term vs. Long-Term Transfers

• Short-term holders were selling their coins on exchanges, incurring losses in the process.
• In the past 24 hours, long-term holders accumulated a substantial quantity of BTC.

Glassnode, an on-chain analytics firm, recently highlighted intriguing patterns in the exchange transfers of Bitcoin’s short-term holders and long-term holders via Twitter. Their analysis revealed an interesting trend: a majority of Bitcoin coins were being sent to exchanges at a loss. In fact, the average exchange inflow bias stood at -0.7, indicating a negative flow. This suggests that many holders were willing to sell their Bitcoin holdings at a lower price, potentially reflecting short-term trading strategies or profit-taking activities.

When assessing the profit/loss ratio (bias) of #Bitcoin deposit volume to exchanges, we note a current negative bias of 0.7, suggesting coins are flowing into exchanges at a loss. pic.twitter.com/6dYAbsFdyg

— glassnode (@glassnode) May 25, 2023

However, a closer examination of the exchange inflow bias based on the duration of holdings revealed a striking contrast between short-term holders and long-term holders.

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Long-Term Holders Going Strong

Long-term holders, often referred to as “Diamond hands,” continue to showcase their resilience and unwavering commitment to their investments. These steadfast investors hold onto their coins for more than 155 days, displaying a remarkable level of risk tolerance.

Despite enduring extended periods of market downturns, these individuals remain resolute and steadfast, refusing to part ways with their holdings. Their ability to weather losses and maintain a long-term perspective sets them apart.

The dedication of these long-term holders is further exemplified by their positive exchange inflow bias of 1.73. This signifies that a majority of their transfers to exchanges were executed at a profit. Their shrewd decision-making and astute timing demonstrate their proficiency in capitalizing on favorable market conditions.

Short-term Holders Succumbing to Pressure

Conversely, short-term holders, those who retain coins for less than 155 days, exhibited a negative bias of 0.69, revealing a trend of these “weak hands” offloading their coins on exchanges at a loss. Given their shorter investment horizon, these holders are more susceptible to market volatility and are prone to liquidating their positions.

An intriguing observation was the significant contribution of this group to the overall exchange inflows. Despite their tendency to sell at a loss, they accounted for a substantial portion of the total coins flowing into exchanges. This suggests that their trading activities and profit-taking strategies play a noteworthy role in shaping market dynamics

How is Bitcoin (BTC) Looking Today?

The current daily charts of Bitcoin reveal a noteworthy struggle as the price attempts to maintain stability within the range of $26,500 to $30,000. This particular zone has been a key battleground for over a month now, with ongoing challenges to sustain its position. Also, on lower timeframes, there are indications of a potential breakdown below this critical range.

Should Bitcoin fail to sustain its position above $26,500 throughout the weekend, it is highly likely that a test of the $25,000 region will become inevitable. However, if Bitcoin manages to regain its position within the consolidation zone, it would signal another retest of the $30,000 region in the near future. The market dynamics continue to unfold, and the outcome will depend on Bitcoin’s ability to hold or break below the crucial support zone.

How to Trade Bitcoin (BTC)?

To understand the basics of Bitcoin trading, you can read our How To Trade Bitcoin Guide. It can prove helpful for traders who are just getting started with Bitcoin trading. You can also check out our list of top Bitcoin Exchanges To Trade With.

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