On-chain data suggests that long-term holders of bitcoin have remained bullish despite the asset’s recent price shock.
Bitcoin Long-Term Holders Not Showing Any Significant Movement
As pointed out by an analyst at CryptoQuant Post, short-term holders have continued to exert selling pressure recently. The relevant indicator here is the “spent output age band” (SOAB), which tells us which investor groups are selling or transferring how many coins.
Here “age bands” refer to groups that are divided based on how inactive a given batch of coins has been. For example, the 1m-3m group includes all investors who held their coins at the same wallet address for at least one month and at most three months ago.
If the BTC SOAB metric were to be applied to this specific group, it would track transactions on the blockchain being made by holders in this age group.
Now, here is a chart that shows the trends in bitcoin SOAB for all the different age bands in the market over the past few months:
The recent movements of the different cohorts in the BTC market | Source: CryptoQuant
As shown in the graph above, Bitcoin SOAB has had some consistently large values for the 0-day to 1-day age band recently. Other youth groups have also shown some noticeable values, but the more aged bands haven’t really seen any significant growth.
The BTC market is generally divided into two main groups: short term holders (STH) and long term holders (LTH). STH includes all investors who have held their coins for less than 155 days, while LTH includes holders who have held their coins inactive for longer than that amount.
This means that the younger age bands correspond to different segments of the STH. As these clusters have recently displayed higher prices, it appears that STH is actively selling the cryptocurrency during the rally.
Statistically, the longer an investor holds their coins, the less likely they are to be sold at any point. For this reason, the movements of older coins can be more significant because they provide a window into how some of the most determined investors are doing in the market.
So far, these LTH have not shown any significant change since the start of the rally, despite the fact that the prices have seen a significant drop in the recent past.
A noticeable example of LTH bands showing a recent spike has been the 6-month to 12-month group, which saw an increase as the US government was moving around confiscated bitcoins.
Naturally, this case was more of an exception and not indicative of a more general trend. LTH not showing any major moves could be a positive sign for the price in the long term as it shows that these diamond hands have still not lost their faith in the cryptocurrency.
At the time of writing, bitcoin is trading around $20,000, down 10% over the past week.
BTC has plunged over the past day or so | Source: BTCUSD on TradingView
Credit : www.newsbtc.com