Analyst firm Glassnode reported that savvy investors are sending their bitcoin to cold wallets to wait for a return to a positive rate of return.
According to a report by Glassnode, long-term investors have increased Bitcoin sales over the past week amid an uncertain macroeconomic environment. Increased pressure from long-term investors has knocked out some short-term holders (STH) from their positions. Just last week, bitcoins held at addresses for more than 6 months accounted for 5% of sales.
The authors of the report argue that the number of short-term holders holding bitcoins for less than 155 days continues to decline, but the reason for this is not necessarily the sale of cryptocurrency. Glassnode suggests that while STHs tend to sell BTC more often, a decline in supply “can only occur when the majority of bitcoin is dormant and exceeds the 155-day threshold, becoming a long-term holder supply.”
According to analysts, the observed Bitcoin accumulation patterns do not suggest a bear market as the overall selling pressure remains constant. In addition, over 75% of the BTC in circulation has been dormant for at least six months, despite the recent surge in sales. Glassnode believes this is evidence that investors are still predominantly pursuing a HODL strategy.
The authors of the report note that the selling of long-term investors in bitcoin occurred in a relatively strong market that avoided any significant moves up or down. This is believed to prevent the “surrender” that often occurs at the end of a bearish cycle. According to CoinGecko, there has been no significant “surrender” since last May, when the price of BTC fell from $58,771 to $34,977 over a 15-day period.
Glassnode believes that Bitcoin accumulation patterns are still above bear market trends. The profit/loss ratio of short-term holders’ supply remains close to the all-time low set in mid-2021. Now, 82% of STH coins are in the red, indicating a later stage of the bear market, with savvy investors sending bitcoin to cold wallets to wait for a return to a positive rate of return.
Last week, Glassnode claimed that some of the investors who bought bitcoin at $69,000 sold the cryptocurrency at a loss. In February, analysts at Glassnode reported that the number of addresses on the Bitcoin network with a non-zero balance reached an all-time high of 40,276,163. Earlier, Glassnode had claimed that Bitcoin blockchain data indicated a bearish trend in the market.
Source: Bits
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