Over the past week, long-term Bitcoin holders have increased their spending to a level that suggests de-risking the market, but hodling remains the predominant investment strategy.
Uncertain macroeconomic headwinds are likely to have precipitated the surge in liquidations last week by long-term holders and pushed some short-term holders out of their positions, according to data from blockchain analytics firm. glass node. Last week, coins older than six months accounted for 5% of total spending, a level not seen since last November.
Short-Term Holders (STHs) that have held coins for less than 155 days continue to decline in number, but not necessarily due to selling. Glassnode suggests that while it is more common for STH to be sold, the recent decline in STH supply "may only occur when a large portion of the coin supply is idle and crosses the 155-day threshold, becoming holder supply at long term".
bitcoin (BTC) accumulation patterns still do not suggest bearish market behaviors, as the general selling pressure remains constant. Furthermore, more than 75% of the circulating supply of BTC has been dormant for at least six months despite the recent spike in sales. Glassnode says this is an indication that investors are still predominantly hodlers.
Glassnode noted that the liquidations have occurred in a relatively strong market that has prevented any significant move up or down and has remained range bound for most of this year. This is believed to prevent a capitulation event that often occurs at the end of a bearish cycle. There has been no significant capitulation since last May, when the price of BTC crashed from $58,771 to $34,977 over the course of a 15-day period, according to CoinGecko.
The period from the capitulation event in May through October marked the last time BTC accumulation resembled bear market behavior.
The STH supply win/loss ratio is still near the all-time low set in mid-2021. Currently, 82% of STH coins remain at a loss, which according to Glassnode is an indication of the later stage of a bear market when savvy investors send their coins to cold storage to await a return to positive profit margins.
Related: BTC Price Struggles Below $39K Ahead of Expected Fed Rate Hike
As noted in BTC market update from last week, foreign exchange outflows remain quite high. Coinbase saw its largest outflows in nearly five years last week with 31,130 BTC leaving the exchange. These outflows illustrate Bitcoin's growing reputation as a must-have in a modern investor's portfolio, and a growing reluctance to liquidate in a hurry.
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