Bitcoin Sell-Side Pressure Dominated By New Holders, Research Shows

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As an analyst with over two decades of experience in the financial markets, I have witnessed numerous bull runs and corrections. The recent price action in Bitcoin (BTC) has been particularly intriguing, as it demonstrates both resilience and volatility.

Bitcoin (BTC) shows strength, hovering near the $100,000 level, even after a recent adjustment that triggered approximately $500 million in liquidations, mainly from long positions. A recent Glassnode study delves into the groups responsible for the selling force during this prolonged bull market surge.

Majority Of Sell-Side Pressure Coming From New Market Entrants

Based on the report “The Week Onchain” by Glassnode, it appears that many long-term Bitcoin holders are cashing out significant gains – approximately $2 billion in a single day – but some remain hesitant to sell their stash.

The report highlights that the Long-Term Holder (LTH) cohort is capitalizing on the inflow of liquidity and strong demand to sell BTC near all-time high (ATH) price levels. Glassnode notes:

Starting from September’s supply peak, this group has dispersed approximately 507,000 Bitcoins. This is a substantial amount, but it pales in comparison to the 934,000 Bitcoins spent during the rally leading up to the March 2024 all-time high (ATH).

The report divides the LTH group into smaller segments according to their profit outcomes from Bitcoin transactions. This helps gain a clearer perspective on the activities of market sellers. Interestingly, it’s found that investors who purchased BTC within the past 6 months to a year have the biggest impact on selling pressure, having cashed out approximately $12.6 billion in profits, which accounts for about 35.3% of all such gains.

Various groups who have held Bitcoin for differing periods have seen varying returns on investment. Specifically, those who have owned it for a year to two years have earned approximately $7.2 billion, followed by those with 2 to 3 years of ownership bringing in around $4.8 billion, $6.3 billion for the 3 to 5-year group, and $4.8 billion for investors who have held onto their Bitcoin for over five years. The report also mentions that:

As a newer crypto investor, I’ve noticed that coins that have been around for the past 6 months to a year dominate the market. This suggests that the majority of transactions are coming from relatively recent acquisitions. It seems that experienced investors who’ve been in the game longer are being cautious and perhaps waiting for prices to climb higher before making bigger moves.

This pattern implies that a rise in profit-making among investors within the 6-month to 1-year timeframe suggests this group is primarily composed of newer investors. These newcomers probably joined the market after the debut of Bitcoin exchange-traded funds (ETF). It seems their approach is centered around short-term profits, aiming to capitalize on the current market upswing.

Bitcoin Adoption Continues To Grow Around The Globe

Although the recent decrease in price might’ve made some investors wary, others believe this dip represents a necessary adjustment, allowing the top cryptocurrency to gather strength and prepare for its subsequent growth phase.

The extraordinary rise in Bitcoin’s value is sparking a sense of immediate concern in businesses and countries globally, similar to what MicroStrategy has done, the Canadian firm Rumble has declared its intention to invest some of its extra funds into purchasing Bitcoin.

In a recent statement, the CEO of Marathon Digital Holdings, Fred Thiel, noted a substantial rise in institutional interest in Bitcoin (BTC) following Donald Trump’s win in the 2024 elections. As we speak, BTC is trading at approximately $95,462 and has seen a 2% increase over the past 24 hours.

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2024-11-28 10:16