Market data indicates that long-term crypto investors are holding their Bitcoin (BTC) while short-term speculators are selling them. These long-term investors are currently trading with ‘young coins,’ and this accounts for approximately 95% of the trades. Glassnode, an on-chain analytics provider, conducted in-depth research in the crypto sphere and realized that 95% of the BTC that was changing hands was moved on the blockchain a little over two months ago.
The Week On-Chain report by Glassnode on March 15 claimed that only 5% of the spent outputs are over three months old. This is an indication that most of the BTC moving on-chain are ‘young coins.’ Glassnode also realized that those addresses that have been holding BTC for approximately 3 years have accumulated their holdings over the past year. On the other hand, short term holders have been maximizing their BTC trading profits since the beginning of 2020.
Knowledgeable Traders versus New Market Players
Long Term Holders or LTH are defined by Glassnode as wallets that have been holding BTC for more than 155 days. Short Term Holders or STH are those wallets that move Bitcoin on-chain within 155 days or those that are receiving coins within that same period.
Glassnode’s report deems LTH as individuals with adverse Bitcoin knowledge because during prolonged bear markets, they accumulate BTC, then offload them during bull markets. This works in contrast to STH who can be new market players or short-term speculators that are concerned with moving value between exchanges.
Glassnode found that at current market prices, 58% of Bitcoin’s circulating supply or 10.85 million BTC are in profit when one looks at the last time they moved on-chain. Additionally, 5.3 million BTC are also in profit and are held by the short-term holders.
New Retail Investors Boosting the Market by Their Large Numbers
Looking at previous market cycles, LTHs are holding more coins at this time, according to Glassnode. The firm also identified that there has been a huge spike in the number of active new entities. This is a positive indicator of new retail investors entering the crypto space and giving it a boost.
According to their tweet on March 15 Glassnode claimed that the number of new participants joining the BTC network in unprecedented.
The number of new participants in the #Bitcoin network is unprecedented.
Over the past weeks, we have seen a large growth of new entities. This is a strong indication that new retail investors have been entering the space.
— glassnode (@glassnode) March 15, 2021
Data gathered over the past weeks revealed a large growth in the people joining the cryptocurrency sphere, with a major focus on Bitcoin. This indicates that retail investors have renewed faith in BTC and are trying to join the network during the current market cycle before it’s too late.
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