Bitcoin: These holders are selling at a loss and that means…

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  • Short-term hold­ers were dump­ing their coins on exchanges at a loss.
  • Long-term hold­ers amassed a sig­nif­i­cant amount of BTC in the last 24 hours.

On-chain ana­lyt­ics firm Glassnode took to Twit­ter to draw atten­tion to the exchange trans­fer pat­terns of Bitcoin’s [BTC] short-term hold­ers (STH) and long-term hold­ers (LTH).

Read Bitcoin’s [BTC] Price Pre­dic­tion 2023–24

The analy­sis divulged that, on aver­age, most coins were flow­ing into exchanges at a loss with a neg­a­tive exchange inflow bias of 0.7.

How­ev­er, when the exchange inflow bias was scru­ti­nized based on the dura­tion of the hold­ings, a stark dif­fer­ence emerged between the STH and LTH.

Weak hands capitulating?

Long-term hold­ers are the par­tic­i­pants who keep pos­ses­sion of coins for more than 155 days. Pop­u­lar­ly referred to as “dia­mond hands, ” this cohort of users is thought to have a high risk tol­er­ance and will not sell despite pro­tract­ed losses.

This group record­ed a pos­i­tive exchange inflow bias of 1.73, imply­ing that most of their trans­fers to exchanges came at a profit.

Source: Glassnode

On the oth­er hand, short-term hold­ers, who hold coins for less than 155 days, reg­is­tered a neg­a­tive bias of 0.69, indi­cat­ing that these “weak hands” were dump­ing their coins on exchanges at a loss. STH are more like­ly to relin­quish posi­tions owing to mar­ket volatility.

It was also inter­est­ing to note that this cohort was the main con­trib­u­tor to over­all exchange inflows.

Source: Glassnode

Diamond hands were profitable

Exam­in­ing the 30-Day MVRV Ratio made it clear that hold­ers of BTC were under water and would incur loss­es of 4.53% on aver­age. How­ev­er, the MVRV Long/Short Dif­fer­ence was pos­i­tive, mean­ing that LTH would real­ize high­er prof­its as com­pared to STH.

This obser­va­tion was in accor­dance with the afore­men­tioned diver­gence in the prof­itabil­i­ty of the two cohorts.

Source: San­ti­ment

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Long-term holders start to accumulate

A big chunk of the LTH were prob­a­bly amass­ing more BTC coins as evi­denced by the sharp spike in the flow of tokens that didn’t move in the last one year. Because the trans­ac­tions result­ed in a price increase, it was pos­si­ble to fore­cast that they were buyer-dominated.

Source: San­ti­ment

At the time of pub­li­ca­tion, BTC exchanged hands at $26,496.51, as per Coin­Mar­ket­Cap. The king coin has entered a phase of con­sol­i­da­tion, with trades over the past week hov­er­ing with­in the nar­row range of $26,400- $27,500.

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