- Data by the leading blockchain analyzer, Glassnode, indicates that long term holders are not selling BTC despite the recent spike in price.
- In contrast, short-term investors are the major sellers.
- Multiple indicators suggest the bull run is likely to continue.
Bitcoin was trading below $30,000 price levels on July 21. However, the leading cryptocurrency has since managed to reach $45,000, recording a two-month high. Despite this sudden surge, which represents a more than 50% gain, long term holders are not selling Bitcoin.
In the 2018 bear market, long term holders were consistently cashing out their Bitcoin holdings after every spike in prices. However, according to data by the leading blockchain analyzer Glassnode, long term holders are now very reluctant to sell their Bitcoin even after a 50% surge.
Despite a strong rally to $45k, the #Bitcoin market still has not seen a significant increase in old coins (> 1y) being spent.
This is very different to the 2018 bear market where old hands took exit liquidity on most relief rallies.
Live Chart: https://t.co/WUsUZNUbkZ pic.twitter.com/JBtXg6Iuet
— glassnode (@glassnode) August 9, 2021
The data reveals that coins aged between 3 to 6 months are those selling now. Arguably, these are short-term investors that are taking exit liquidity. On the other hand, Bitcoins older than a year—coins that haven’t been traded within the last year—are not selling.
A fair explanation can be that during 2018, the surge in prices was as a result of ICO scam promotions. In contrast, the 2021 rally was triggered by a number of legitimate macroeconomic trends as well as high-profile institutions dabbling into Bitcoin and pouring billions of dollars into it.
Bitcoin Shows Resilience
Other indicators are also suggesting a continued bull run for Bitcoin. For one, as covered by FullyCrypto, some market analyzers expect a 0.5% spike in prices for the upcoming inflation report for the month of July. Since inflation has been one of the major incentives pushing more investors toward Bitcoin, there is great chance investors would avoid chasing out their Bitcoin any time soon.
Furthermore, Bitcoin’s circulating supply on centralized exchanges recently hit its 2021 low of 13.2%. This has convinced some analysts that Bitcoin may soon face a supply squeeze. Willy Woo, a leading on-chain analyst, believes that there is an exceptional impending supply squeeze just around the corner. He said:
I’ve not seen a supply shock opportunity like this since Q4 2020 when BTC was priced at $10k only to be repriced at $60k in the months thereafter. Our supply shock is still in play with higher prices expected.
Woo has also said that Bitcoin would resume its uptrend, aiming at $50,000 as its next target. “My expectation is similar to BTC at $20k all-time-high in January, where the price is pinned close to the $40k-$42k ceiling over a period of days (2 weeks maximum) wearing down sellers, followed by a faster move to $50k. The next major consolidation band is $50k-$65k,” he said.
