Bitcoin Short-Term Holders Exit the Market as Long-Term Holders Accumulate Their Positions

A recent analysis by crypto analytics firm CryptoQuant has revealed a significant shift in the dynamics of Bitcoin ownership

Short-Term Bitcoin Holders Sell Off as Long-Term Holders Accumulate Amid Weak Demand

A recent analysis by crypto analytics firm CryptoQuant has shown that short-term bitcoin (BTC) holders, defined as those that have held their bitcoin for 155 days or less, have been steadily reducing their positions since late May, indicating weakening demand for the cryptocurrency.

In contrast, long-term BTC holders appear to be accumulating their positions as short-term holders sell off their holdings. CryptoQuant’s data shows a notable trend over the past few months, as short-term holders have significantly reduced their positions, particularly in July and August.

This sell-off by short-term holders could lead to medium-term price appreciation and market stabilization, according to CryptoQuant contributor IT Tech, who wrote that the “data shows a clear capital flow from weak hands (STH) to strong hands (LTH), signaling market stability.”

According to the analysis, the short-term holders sold off their bitcoin holdings in the past two weeks, either realizing profits or losses in the process.

The trend comes short after sentiment in the cryptocurrency market dipped into “extreme fear” after the price of the flagship cryptocurrency dropped to $53,500 in a massive downturn that saw the space’s total market capitalization dip below the $2 trillion mark.

The Crypto Fear & Greed Index, which serves as an aggregate for investor confidence and attitude towards the market, dropped to 22, before it started recovering. The index saw a low around 6 when BTC dropped below $18,000 in 2022 after the collapse of popular cryptocurrency exchange FTX

Bitcoin has since recovered and is now trading at $56,700. Notably some analysts are bullish on the cryptocurrency, with cryptocurrency analyst MetaShackle on TradingView recently publishing analysis showing the cryptocurrency’s chart is forming an “absolutely massive” cup and handle pattern that could lead to a massive price rise.

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