Long-term Bitcoin holders are demonstrating remarkable resilience amid the most severe correction of the current Bitcoin price cycle. According to blockchain data analysis platform Glassnode, these steadfast investors, known as “diamond hands,” are not selling despite the steep price drop. The latest edition of Glassnode’s weekly newsletter, The Week Onchain, underscores the strength of these investors’ resolve.
Why Are Long-Term Holders Not Selling?
Glassnode analysts reveal that, when measured against the Bitcoin halving date, the current price cycle is among the least successful. They note that this outcome is unprecedented, even though a new cyclical all-time high was reached before the halving event slated for April. Despite this, long-term holders are maintaining their positions.
Contrary to previous significant capitulation events in Bitcoin’s history, many long-term investors are holding onto their assets. Even when the BTC/USD pair dropped to a four-month low of $53,500, their determination remained unwavering. This week’s loss-taking activities accounted for less than 36% of total capital flow within the Bitcoin network, compared to over 60% during major capitulation events in September 2019, March 2020, and May 2021.
What Are the Implications for Bitcoin Investors?
Long-term and short-term holders are defined by Bitcoin wallet assets held for more than 155 days or less, respectively. The latter reflects the speculative segment of the investor base. Glassnode has provided a chart illustrating the minimal participation of long-term holders in on-chain sales at a loss during the recent Bitcoin price drop. Analysts further elaborated, noting that despite 18 months of upward price movement following the FTX bankruptcy and three months of lateral trading, the most recent correction is the steepest in this cycle. Nonetheless, the current cycle’s declines remain positive compared to historical ones, suggesting a robust underlying market structure.
Key Takeaways
– Long-term Bitcoin holders are not selling despite steep price corrections.
– The current price cycle is one of the worst-performing when indexed to the halving date.
– Losses this week from both long-term and short-term holders are lower compared to previous significant capitulation events.
– The underlying market structure remains strong despite the recent correction.
Overall, the resilience shown by long-term Bitcoin investors during the recent price correction indicates confidence in the cryptocurrency’s future potential. This behavior contrasts with previous market downturns, where both long-term and short-term holders contributed significantly to sales at a loss.