Bitcoin (BTC) speculators are experiencing a period of “exhaustion and apathy” across the market, according to a new study.
In the latest edition of its weekly newsletter, The Week On-Chain, analytics firm Glassnode expressed the dwindling conviction of short-term Bitcoin (STH) holders.
Bitcoin speculators risk unrealized losses
After several months of stagnant BTC price action, frustration among market participants has led to predictions of even deeper downside.
Bulls remain unable to break the resistance, while sellers also face multiple support zones in the form of trend lines between the current $29,000 and $25,000.
This includes the STH cost basis or realized price. STHs are defined by Glassnode as units that hold coins for 155 days or less and correspond to the more speculative end of the bitcoin investor spectrum.
The STH cost base has served as support throughout 2023 but is rising rapidly and currently stands at $28,600.
In contrast, the long-term owner (LTH) cost basis, which reflects the total purchase price of the most persistent hodlers, is far lower at $20,300.
“The disconnect between these two cost bases is an indicator that many newer buyers have a relatively high purchase price,” commented Glassnode.
The researchers further described that the market may be “top heavy”, with even a minor drop in BTC price now propelling the STH cohort into the red.
“At the macro level, this supply distribution resembles similar periods during past bear market rallies,” they argued.
“In the shorter term, however, one could expect this to be a slightly top-heavy market, with many price-conscious investors at risk of suffering an unrealized loss.”Bitcoin long-term/short-term on-chain cost basis annotated chart (screenshot). Source: Glassnode
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Still, speculators appear to have already started to reconsider their exposure to the market.
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The portion of BTC supply controlled by STH units has declined, while LTHs now control a larger chunk than ever before.
“We note that the supply held by long-term holders continues to increase, reaching an ATH of 14.6 million BTC. In direct contrast, the supply of short-term holders has fallen to a multi-year low of 2.56 million BTC,” added The Week On-Chain.
“Overall, this suggests that Bitcoin investor conviction remains impressively high, with very few prepared to liquidate their holdings.”
The last time STHs had such little market presence was in October 2021, just before BTC/USD touched its current all-time high of $69,000.
Chart showing long-term/short-term bitcoin holder thresholds. Source: Glassnode
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