Data: Bitcoin Sentiment is Strong as Long-term Holders Do Not Sell
Image courtesy of 123rf.

Data: Bitcoin Sentiment is Strong as Long-term Holders Do Not Sell

400k BTC/month are maturing into 3m-12m age bands — meaning diamond hands are tightly holding their Bitcoin.
Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

A recent report from the leading blockchain analyzer Glassnode reveals that long-term holders are considerably reluctant to trade their Bitcoin at the current price levels. As per the report, investors who purchased Bitcoin prior to January 10, 2021, have generally kept on hodling for the last three to twelve months.

Long-term Hodlers Keep on Hodling

Long-term BTC holders—those who accumulated BTC during the latest bull market (throughout 2020 to Jan 2021)—have been consistently holding their assets. Reportedly, their Bitcoins have remained in the same wallet for the last 3 to 12 months.

Furthermore, there is a considerable decline in very young coins — Bitcoins being traded within the last month. This comes at a time when the rate of maturation, i.e. Bitcoins not being traded within the last 155 days or more, is over 400k BTC/month. In comparison, 160k BTC was sold during the May capitulation event. This means that 2.5x the total Bitcoins sold during the May capitulation event are maturing every month. 

Image courtesy of Glassnode.

The CDD-90 metric, an indicator that gives more weight to coins that haven’t been traded within the last 90 days, also supports the theory that long-term holders are continue to hold. As can be seen in the CDD-90 chart below, the spending of ‘old’ BTC has been in decline since mid-March. This is yet another indication that long-term holders have not sold during the current dip.

Image courtesy of Glassnode.
Join our Telegram group and stay connected to all things crypto, DeFi, and finance.

Next Bitcoin Rally to Start Soon?

While long-term holders keep on holding, it’s good to remember that they are the ones with an unshakable conviction in Bitcoin. It’s fair to remember that they might actually be buying the dip. At least, this is the case for the Bitcoin maximalist Michael Saylor:

In recent weeks, Michael Saylor has made headlines several times with his intentions to buy Bitcoin. First came the news that Microstrategy aims to sell $500 million worth of junk bonds, and to use the proceeds to fund the purchase of more Bitcoin.

Then, on the same day MicroStrategy completed the sale of $500 million in bonds, the company announced that it will be selling $1 billion worth of its own stock to acquire more Bitcoin. While the entire $1 billion is unlikely to be spent on Bitcoin purchases, considering Saylor’s insatiable appetite for Bitcoin, it’s fair to assume that a major part of the funds will indeed go to Bitcoin.

Apart from Michael Saylor, various other positive news occurred surrounding the crypto world this week that are quite promising. Let’s take a brief look at the more prominent ones:

  1. In a historic move, El Salvador voted to adopt Bitcoin as legal tender
  2. Texas announced that state-chartered banks will be allowed to offer custodial services for digital assets.
  3. Prices have risen by 5.0% over the last 12 months, which leaves most people with only one choice to hedge against inflation: buy crypto.
  4. Paul Tudor Jones said he will buy crypto if the Fed says inflation is “transitory.”
  5. Goldman Sachs acquires crypto companies and may try to hedge against inflation using cryptocurrencies. 

Putting together all pieces of the puzzle, one could strongly argue that Bitcoin, and crypto as a whole, is warming up for another rally. 

Do you think another Bitcoin rally is imminent? If yes, when do you think it will start, or do you think it has already started? Let us know in the comments below.

Cookies & Privacy

The Tokenist uses cookies to provide you with a great experience and enables you to enjoy all the functionality of the site.