As a seasoned crypto investor with battle-scarred fingers from riding the volatile Bitcoin rollercoaster, I find solace in the recent exodus of short-term holders. Having learned my lessons from past dips, I’ve come to understand that these temporary setbacks often pave the way for long-term growth.
Bitcoin‘s price is currently rebounding after a significant drop to $60,000 in early October. With bullish investors and long-term holders taking advantage of this dip, an examination of on-chain data suggests that the market has experienced substantial relief from selling pressure. This is largely due to short-term holders leaving the market, a group that had contributed to the price drop to $60,000 as they were among those selling off their Bitcoin during the initial decline, intensifying the price fall.
Short-Term Holders Exit The Market
Based on an examination of different categories of Bitcoin owners utilizing data from CryptoQuant, there’s been a significant reduction in the amount of Bitcoin owned by short-term investors since the start of this month. This decrease has seemingly caused a drop in Bitcoin’s price during this period. However, it doesn’t automatically mean bad news for cryptocurrency in the long run. The reduction is evident in the purple bars you see below, with each instance of price decreases marked by an uptick in short-term investors selling their Bitcoins.
As a researcher, I observed that the value of Bitcoin, which closed September at approximately $65,000, started October on a downward trend amidst escalating market turmoil. This turbulence resulted in a 7.5% drop in Bitcoin’s price, bottoming out at $60,100. Interestingly, the graph suggests that this latest descent to the $60,000 mark coincided with an increase in purple bars, indicating that short-term holders significantly contributed to the price fall through their selling activities.
What Does This Mean For Bitcoin?
As I delve deeper into my study, it appears that the recent market selloff has led to an increased accumulation by long-term investors, potentially establishing a price floor around $60,000 in the upcoming weeks and months. This trend suggests a transition of bitcoins into more robust hands, indicating a preference for holding rather than selling.
Significantly, the departure of numerous short-term investors has resulted in a more advantageous overall purchase price for this group. Based on data from CryptoQuant provided by a certified analyst, the current average cost for one to three-month holders stands at approximately $61,633, while the average cost for three to six-month holders is around $64,459.
Currently, Bitcoin is valued at $62,130, placing it between two significant groups of investors who are long-term and short-term holders. As per analyst Burak Kesmeci, if Bitcoin manages to close above the $64,500 mark, it will bolster the bullish sentiment, making both long and short-term investors more optimistic about keeping their holdings. Conversely, a dip below $61,600 could cause an increased selling wave from short-term investors, possibly causing the price to drop again towards $60,000.
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2024-10-09 19:16