Bitcoin (BTC) long-term holders are refusing to sell during the “most severe correction” in the current BTC price cycle.
Cryptocurrency analytics firm Glassnode has some good news for Bitcoin holders in the latest issue of its weekly newsletter, “The Week Onchain.”
Glassnode Praises ‘Strong’ Bitcoin Market
Bitcoin may be experiencing its biggest drop of the current bull market, but the “diamond hand” shows no signs of panicking.
For Glassnode, “If you look at Bitcoin’s performance relative to its halving dates, you can see that the current cycle is one of the worst performing cycles.”
“This is the first time this has happened as the market broke to a new cyclical ATH ahead of the April halving event,” he summarized.
In contrast to the well-known capitulations in Bitcoin’s recent history, as Glassnode shows, long-term holders are holding on to their BTC. Even the recent trip to a 4-month low of $53,500 for BTC/USD has not shaken their resolve.
“When we look at the losses locked up by long-term and short-term holders, the losses experienced this week account for less than 36% of the total capital flow across the Bitcoin network,” the newsletter reads.
“In major capitulation events such as the September 2019, March 2020 and May 2021 sell-offs, losses accounted for more than 60% of capital flows for several weeks, with meaningful contributions from both groups.”
Long-term and short-term holders refer to Bitcoin wallet entities that have held a given BTC unit for more than 155 days or less than 155 days, respectively. The latter term reflects the more speculative end of the Bitcoin investor spectrum.
Glassnode has created a chart showing that long-term holders are losing money and not participating in on-chain sales when the price of BTC falls.
“After 18 months of bullish trading and 3 months of sideways trading following the FTX crash, the market has experienced its deepest correction of the cycle,” he wrote in part of his conclusion.
“Nevertheless, the drawdown in the current cycle still compares favorably with historical cycles, suggesting a relatively robust underlying market structure.”
How many weeks will it take for the BTC price to rebound?
As Cointelegraph reported, short-term holders and day traders are taking notice as profit margins turn negative.
Related: Bitcoin Sellers Are Trying to Keep BTC Price Below $60,000
According to Glassnode, at the low of $53,500, short-term holders held approximately 2.8 million BTC, or 14.2% of the total supply, as unrealized losses.
Miners are also concerned, with the hashrate capitulation phase continuing, reminding long-time market observers of the events that will lead to a bear market bottom in late 2022.
“The biggest Bitcoin crash since the FTX scam and the subsequent plunge to $15,000 was preceded by a hash ribbon capitulation signal that occurred in mid-May,” Charles Edwards, founder of quantitative Bitcoin and digital asset fund Capriole Investments, warned followers of X (formerly Twitter) this week.
In a later discussion, Edwards suggested that a buy signal could appear “at least a few weeks later.”
This article does not contain any investment advice or recommendations. All investment and trading moves involve risk, and readers should conduct their own research when making decisions.