Bitcoin (BTC) speculators net sold more than 21,000 BTC last month, the highest level on record.
In a September 9 Quicktake blog post, on-chain analytics platform CryptoQuant said capital is “flowing” to long-term holders.
Bitcoin’s ‘Diamond Hands’ Gets Caught in the Accumulation Frenzy
The BTC price volatility in recent weeks has caused a collapse in confidence among new holders.
According to CryptoQuant, which tracks the 30-day net position change between short (STH) and long (LTH) holders, short-term holders have reduced their holdings by 21,600 BTC in the 30 days through September 8.
“STH net positions have decreased significantly over the past two weeks, indicating that short-term investors are selling their holdings in response to recent market volatility,” contributor IT Tech wrote.
IT Tech named the net position reduction as one of “several major trends” currently underway at STH (a designation given to institutions that have held a certain amount of BTC for less than 155 days). They said other institutions are “pulling out of the market” and “reducing risk.”
This data stands out as a rare anecdote in the history of STH monitoring: a 30% decline this large has not occurred since mid-2021.
On the other hand, the situation is quite different for LTH. Accumulation is in full swing, and the 30-day net position increase for this group has reached a total of 22,000 BTC.
This is roughly the same amount as the decline in STH positions, and is also the largest increase in years.
IT Tech concluded that “increased LTH accumulation could lead to price stabilization and prepare the market for a potential rebound, while STH selling could put short-term downward pressure on the BTC price.”
“The data shows a clear flow of capital from the weaker hand (STH) to the stronger hand (LTH), indicating market stability.”
BTC goes from weak to strong hands.
Cointelegraph frequently reports on the changing dynamics among Bitcoin holders.
Related: Is Cryptocurrency Entering a Bear Market? — 5 Things to Know About Bitcoin This Week
For example, the total cost basis of STH companies typically serves as long-term support during bull markets.
The recent trend line reaching $64,000 has become unreliable and shows that there is still significant unrealized loss between STH.
According to CryptoQuant, STH currently owns less than 18% of the available BTC supply.
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.