Bitcoin Long-Term Holders Reaccumulating for First Time since December

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As an experienced financial analyst, I find Glassnode’s latest report on Bitcoin’s long-term holder behavior and market dynamics intriguing. The data suggests a shift from a distribution phase to a re-accumulation phase for long-term holders, which could indicate a potential bullish trend in the near term.

Glassnode, a well-known market intelligence firm, has announced a significant shift in the actions of long-term Bitcoin investors. For the first time since late 2023, these investors have resumed buying or “re-accumulating” Bitcoins. According to the most recent data, despite Bitcoin’s current trading price being close to its all-time record high, long-term holders are once again increasing their Bitcoin stashes.

As an analyst, I’ve noticed that following a notable selling period earlier this year, which coincided with Bitcoin’s price surge to a record high of $73,000 in early March, there’s been a shift in sentiment among long-term holders. The intense pressure to sell during this time created an oversupply situation and contributed to a consolidation phase for Bitcoin. However, recently, I’ve observed that the urge to sell from these holders has lessened, giving way to a phase of re-accumulation.

Based on the findings from Glassnode’s analysis, I can confirm that according to on-chain analytics firm Onchained, investors who have held Bitcoin for over a year and even longer than two years have ceased to sell off their coins. This information is significant as it suggests a potential shift in sentiment among long-term holders.

“The 1-year+ and 2-year+ cohorts have transitioned from a distribution phase to a holding phase.”

A Rise in Demand

According to Glassnode’s analysis, I’ve noticed a resurgence of buying interest based on some key indicators. One of the most notable signs is the substantial daily inflows into bitcoin spot Exchange-Traded Funds (ETFs). The data shows that these funds have been adding an average of $242 million each day over the past week.

The large inflow of funds stands out starkly against the consistent selling pressure from miners that had previously averaged approximately $32 million in daily transactions. According to the report.

Given the normal selling of cryptocurrencies by miners every day, the demand to buy from these ETFs is approximately eight times greater. This underscores the significant role these ETFs play in the market, while also indicating that the impact of the upcoming halvings may be relatively minor.

From a researcher’s perspective, as the market hits new record highs and enters uncharted territory in terms of prices, I notice the onset of the Euphoria phase. This stage is marked by an impressive 93.4% of Bitcoin supply being held in profit. Historically, this phase can last anywhere from 6 to 12 months, implying a prolonged period where holders are satisfied with their investments and expect further price growth.

Long-term investors apply a subtle strategy in their analysis, striking a balance between cashing in profits and waiting for potential price growth.

A Comparison with Past Bull Cycles

Although there are encouraging indicators of renewed growth and positive investor attitudes, Glassnode notes that the ongoing Bitcoin bull market seems less intense than past cycles based on their analysis.

As a researcher studying Bitcoin’s price trends over the past three months, I have observed that there have only been five instances where weekly, monthly, and quarterly gains exceeded 3.3%, 7.4%, and 25.6%, respectively. These gains occurred within a span of 90 days. However, historical data suggests that in previous market cycles, such occurrences typically took place more frequently, occurring between 18 and 26 days within the same timeframe. This observation implies that the current market sentiment could be less exuberant compared to past bull markets.

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2024-05-29 15:48