According to data, long-term Bitcoin holders only sold around $600,000 worth of BTC during the flash crash (when the price plummeted to $49,500).
On-chain analytics platform CryptoQuant recently revealed a striking contrast between Bitcoin (BTC) holders in one of their Quicktake blog posts.
Bitcoin ‘Diamond Hand’ Sold at $600K Loss
Bitcoin’s August 5 plunge below $50,000 was part of a larger panic that followed Asian stock markets reversing months of bullish momentum.
According to the latest data, there was a BTC sell-off, causing BTC/USD to lose $20,000 in just one week.
However, CryptoQuant contributor Cauê Oliveira analyzed the age of coins involved in unchained transactions and found that overwhelmingly, the coins that were resold at a loss were the “youngest” coins.
“When looking at output spent by age group, it’s clear that the largest volume of on-chain movement comes from coins created within a week,” he summarized.
Coin “age” refers to the amount of time a given BTC unit has been dormant before being used in a recent transaction. Traditionally, coins with an age of up to 155 days are associated with short-term hodler (STH) or speculators. These are people who have no history of “hodling” and are focused on generating profits.
“Overall, more than $5.2 billion was moved in the short term in the one-day and one-day to one-week timeframes alone,” Oliveira added.
Compare this to the movement of coins that have already been fixed for a long time, which are more likely to be owned by long-term hodlers (LTH), and you can see the contrast in investor mindset at a glance.
“If we dig deeper into the spending patterns, we see that this downtrend has resulted in losses of approximately $850 million,” Oliveira said.
“However, only $600,000 was realized by LTH. The rest was realized by short-term investors. The largest volume was concentrated in investors with a 3-month term, indicating that the price decline is putting pressure on new investors to capitulate.”
The historical significance of the “huge” number of losing on-chain transactions was also noted by crypto investor and YouTuber Quinten, who cited data from fellow CryptoQuant contributor Axel Adler Jr. on X.
BTC Price Faces ‘Second Wave’ of Chaos
Since then, BTC/USD has bounced more than 10% off its six-month low, but data from Cointelegraph Markets Pro and TradingView confirm that not everyone believes the worst is over.
Related: Bitcoin’s Drop Is Similar to the Start of the 2016 Bull Market – Peter Brandt
As Cointelegraph reported, investors still see BTC price targets in the $40,000 range.
Meanwhile, Arthur Hayes, former CEO of cryptocurrency exchange BitMEX, warned X followers on August 6 that the market-wide relief rebound would be short-lived.
“That was the first wave. Now we are waiting for TradFi’s corpse to surface as leveraged idiots,” he wrote, referring to victims of the Japanese yen carry trade that is believed to have formed the bulk of the fallout from this week’s Nikkei crash.
“Then wave 2 starts. If there is a bailout, the market will have to endure more pain until Friday. Enjoy your break, the war will continue.”
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.