"Panic Selling by Short-Term Bitcoin Holders Fuels Long-Term Investor Accumulation"

Panic Selling? Short-Term Bitcoin Holders Retreat as Long-Term Investors Accumulate BTCA recent analysis by crypto analytics firm CryptoQuant has revealed a significant shift in the dynamics of Bitcoin ownership, showing that short-term holders are experiencing the largest amount of unrealized loss since the bear market lows in 2022. This has added more pressure on prices due to fears of another sell-off, according to the latest edition of the “Bitfinex Alpha” report.The average price of short-term Bitcoin investors sits at $64,860, which could trigger capitulation if another sell-off happens. The Short-Term Holder MVRV (Market Value to Realised Value) ratio compares the current market price of BTC to the price at which coins were last moved on the blockchain. When the MVRV ratio is below one point, as it is currently, it indicates that short-term holders would sell at a loss if they decided to liquidate their positions. This situation increases the likelihood of selling pressure in a bearish market.Bitcoin’s price has fallen 33% from its all-time high of $73,666, marking the largest such decline of this cycle. The Mayer Multiple, which compares the current Bitcoin price to its 200-day moving average (200 MA), dropped to 0.88, its lowest level since the FTX collapse in November 2022. This decline in the Mayer Multiple to such a low figure highlights a pronounced bearish phase in the market, suggesting that bitcoin was trading well below its average historical price trend.The Short-Term Holder Realized Price (STH Cost-Basis) currently stands at $64,860, representing the average purchase price for investors who have held their coins for 155 days or less. Recently, Bitcoin’s spot price approached one standard deviation below this level, a rare occurrence that has only happened in 7.1% of trading days. This deviation highlights the intensity of the recent market downturn and indicates significant stress among newer market participants.In contrast, long-term Bitcoin holders are accumulating BTC. According to CryptoQuant, the volume of bitcoins owned by short-term investors has been decreasing since late May, hinting at a decline in demand for the digital currency. In contrast, those holding Bitcoin for the long term seem to be enhancing their investments while short-term investors liquidate their assets. The absence of accumulation among short-term holders may imply that demand for Bitcoin is still weak.The data indicates a distinct movement of capital from less committed investors (short-term holders) to more established ones (long-term holders), which can be interpreted as a sign of market stability. The net positions of long-term holders have grown, indicating that these investors are still in the process of accumulating Bitcoin. This evolving situation could set the stage for a market recovery, as the heightened accumulation by long-term holders might contribute to price stabilization.The recent price fluctuations of Bitcoin have had a significant impact on short-term holders. Although most of these investors are facing losses, the overall market remains profitable. The recent price increase has brought about optimism but also highlighted the need to break through key resistance levels. As Bitcoin seeks to stabilize above $60,000, investors should remain vigilant and closely monitor market dynamics.In summary, the recent sell-off by short-term holders could lead to medium-term price appreciation and market stabilization. The trend indicates that long-term holders are accumulating BTC, while short-term holders are liquidating their assets, which could pave the way for potential price growth and market stability.