According to analysis, Bitcoin (BTC) is competing with “new investors” in a similar fashion to its 2020 all-time high.
In a September 2 Quicktake blog post, on-chain analytics platform CryptoQuant compared the current short-term holding trend to mid-2019.
Bitcoin All-Time High Buyers Take a Hit
People who bought Bitcoin in the last six months are either holding on or selling at a loss after the BTC price has been trading sideways for half a year.
According to CryptoQuant contributor Avocado_onchain, the surge in unspent transaction outputs (UTXOs) that are six months or younger reflects the excitement that followed Bitcoin’s all-time high of $73,800 in mid-March this year.
The post reads, “These are probably new investors who entered the market around March of this year when the Bitcoin price peaked.”
“The declining percentage of these UTXOs suggests that either these investors are exiting the market after taking losses amidst Bitcoin’s stagnant movement, or they are holding and converting to a group that has been holding for more than six months.”
Bitcoin Realized Cap UTXO Age Chart. Source: CryptoQuant
The attached chart shows similar levels of new investor UTXOs in 2019, when it took nearly 500 days for BTC/USD to reach its all-time high of $20,000 in December 2017 after hitting a local high.
The post continues, “A similar pattern occurred around the 2019 halving event, with Bitcoin taking around 490 days to reach a new all-time high (ATH) afterward, acknowledging the impact of the COVID-19 pandemic.”
New Investors Are “Crucial” to BTC Price Rise
The “new investor” group differs from the traditional understanding of “short-term holders,” which are defined as entities that hold a certain amount of BTC for up to 155 days.
relevant: Even as Bitcoin price nears $60,000, traders still see September as a bearish month.
The cost basis of these speculators often forms a key support level during bull markets, but is currently above the spot price, leaving short-term holders with unrealized losses overall.
Avocado_onchain concluded that “the current Bitcoin price has been in a large range for over six months and there is no clear trigger for a breakout.”
“While there is no doubt about the long-term uptrend, I think it would be wise to lower expectations and monitor the market closely in the short term. Historically, the inflow of capital from new investors has been a key condition for Bitcoin price appreciation.”
As Cointelegraph reported, other on-chain data shows a similar picture to four years ago.
Bitcoin hash price, which measures miners’ production costs, is close to a level that could mark a long-term BTC price floor.
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.