Bitcoin holders are showing growing confidence in the market as both short-term and long-term investors have reduced their sell-offs. This trend is being closely monitored by analysts, as it could signal a potential price rebound. Blockchain data suggests that the panic selling that typically occurs during market downturns is easing, and both short-term and long-term Bitcoin holders are becoming less willing to sell at a loss.
Short-Term Holders Reduce Sell-Offs
Glassnode, a prominent on-chain analytics firm, recently reported that short-term Bitcoin holders, who have held BTC for less than 155 days, have significantly reduced the amount of Bitcoin being sold at a loss. Earlier this month, the seven-day moving average of Bitcoin sold at a loss spiked to about 5,500 BTC. However, this figure has since dropped to approximately 3,800 BTC, aligning with the yearly average of 3,500 BTC.
This decrease in panic selling suggests that short-term holders are under less pressure to sell compared to previous market downturns. Although the sell-off volume in February is slightly higher, it remains well below the levels seen in August 2023, when the figure peaked at 7,500 BTC. This reduction in sell-offs indicates that short-term holders are more willing to ride out the current market conditions, which could help to stabilize prices.
Long-Term Holders Show Resilience
Long-term Bitcoin holders, who have held their BTC for over 155 days, have shown significant resilience during the recent market volatility. Over the past year, their losses have remained relatively minimal, with weekly averages rarely exceeding 500 BTC. As of recent measurements, this number has nearly fallen to zero.
The lack of activity from long-term holders reflects their confidence in Bitcoin’s long-term growth. This group is largely unaffected by short-term price movements, and their unwillingness to sell suggests a belief that Bitcoin will continue to appreciate over time. This behavior strengthens Bitcoin’s support levels and helps stabilize the market.
Whale Activity Shows Strong Support
Another indicator of market stability is the activity of Bitcoin whales, or large holders who control a significant portion of the Bitcoin supply. Analyst Axel Adler Jr. from CryptoQuant observed that new Bitcoin whales, who have held BTC for less than 155 days, have an average realized price of around $89,200. This price has become a key support zone during Bitcoin’s current consolidation phase.
Whales who purchased Bitcoin at this price are less likely to sell at a loss, which further stabilizes the market. The overall low amount of Bitcoin being sold at a loss suggests that profit trends are becoming more significant in this market cycle. Adler Jr. noted that during Bitcoin’s previous consolidation at $70,000, it took around two months for momentum to build before the next rally occurred.
External Factors May Drive Bitcoin’s Growth
While Bitcoin’s price movements are largely influenced by market sentiment, they are also affected by external factors. One such factor is the potential for increased liquidity due to the U.S. Treasury General Account (TGA) drawdown, which could occur as a result of ongoing debt ceiling issues. This situation mirrors quantitative easing (QE), which historically has boosted Bitcoin’s price.
Crypto analyst Miles Deutscher highlighted that Bitcoin experienced significant rallies during previous TGA drawdowns. In December 2022, Bitcoin surged by 84%, and in June 2023, it gained 23%. Should a similar liquidity boost occur in the future, Bitcoin could see substantial price gains. For example, an 84% increase would push Bitcoin’s price to $176,448, while a 23% rise would bring it to $117,952, both of which would mark new all-time highs.
Conclusion
Bitcoin’s market dynamics are showing positive signs, with both short-term and long-term holders reducing sell-offs and showing confidence in the asset. Whale activity, strong support zones, and potential external liquidity factors suggest that Bitcoin could experience a rebound in the near future. With these indicators in play, the stage may be set for Bitcoin to continue its upward momentum in the coming months.
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