Blockchain analytics firm Glassnode is revealing how long-term and short-term Bitcoin (BTC) holders are responding differently to the current weakness in the crypto market.
Based on the realized cap HODL waves metric, which shows how holders of different age brackets of Bitcoin spend their coins, Glassnode says that long-term BTC holders are holding on tight to their coins despite the ongoing price correction.
“We’re seeing the equilibrium of coins flowing in and out of exchanges and really short-term holders appear to be the most fearful cohort. Long-term holders are more or less hanging onto their coins and not doing a great deal with them.”
Glassnode says that while short-term traders are buying coins, they sell them soon after when they see prices moving down.
“People are buying the dip and then it turns out it wasn’t the last dip, so they’re selling again and then someone is buying it. They’re going through this almost oscillation behavior, which you can see in the balance on exchanges. For every coin that goes in, a week later, those coins have come out.”
Glassnode says that young coins moving into old hands is a constructive sign, but a scenario to watch out for is if the long-term holders start to spend their Bitcoin.
“A more bearish case is if we see [the realized cap HODL waves metric] start to climb again, which shows that old coins are being spent and that means that there’s a loss of conviction in some of those longer-term holders.”