Rebecca Moen
13 Aug 2024 13:40
According to Glassnode Insights, despite the recent market downturn, Bitcoin investors are increasingly HODLing, suggesting a shift toward accumulation.
According to Glassnode Insights, despite the cryptocurrency market experiencing its biggest downturn of the cycle, there is a significant shift among Bitcoin (BTC) investors towards HODLing and accumulation.
summation
After months of massive circulation pressure, Bitcoin holders are showing signs of returning to HODLing and accumulating. While spot markets show continued net selling pressure, a significant portion of the network wealth is now held by long-term holders (LTH), indicating high confidence in this group.
Return to HODLing
The market has been slow to recover since last week’s selloff, creating uncertainty and indecision among digital asset investors. However, on-chain data shows that the trend toward HODLing is increasing. Since the ATH in March, the market has experienced significant supply distribution, but in recent weeks, a reversal has been seen, especially among large wallets that are often linked to ETFs.
The Accumulation Trend Score (ATS), which measures weighted balance changes, shows a return to accumulation, reaching a high of 1.0 last month. This trend is also evident in LTH, which added +374k BTC to its holdings over the past 3 months.
Biased assessment of the spot market
Despite the technical downtrend, spot prices remained above the Active Investor Cost Basis, a key investor sentiment threshold. This resilience suggests sustained positive market momentum in the short to medium term.
The cumulative volume delta (CVD) indicator, which measures the net balance between buying and selling pressure in the market, shows a consistent net sell-side regime since the new ATH. However, the adjusted variation of the CVD indicator indicates a potential recovery in spot market demand.
Cycle Navigation
The recent sideways price action has slowed down the distribution of LTH, resulting in a stable and growing percentage of the network wealth held by this group. Despite significant selling pressure, the wealth held by LTH remains at historically high levels compared to previous ATH breakouts, suggesting potential future selling pressure if BTC price rises.
The LTH Sell-Side Risk Ratio, which measures realized profits and losses relative to asset size, remains low, suggesting that LTH is waiting for prices to rise further before increasing circulation pressure. This behavior demonstrates a patient and resilient holding base even in times of market volatility.
Summary and Conclusion
Long-term Bitcoin holders are showing strong conviction and increased accumulation behavior despite the difficult market conditions. The increased percentage of Bitcoin network wealth held by LTH compared to previous cycles shows investor patience and resilience, with no panic selling during the largest price contraction of the cycle.
Disclaimer: This report does not provide investment advice. All data is provided for informational and educational purposes only. Investment decisions are the sole responsibility of the individual.
Image source: Shutterstock