Longtime Bitcoin (BTC) HODLers forego selling their holdings, as on-chain data from Glassnode shows.
According to Glassnode’s “BTC Percent Supply Last Active 2+ Years” indicator, Bitcoin, which was last moved well over two years ago, hit a three-month low of 45.364%.
This trend suggests that Bitcoin HODLers who bought at the top of the last bull cycle in 2018 and earlier are showing deeper conviction as BTC consolidates over $ 55,000. Interestingly, the December 2020 spike suggests that many sold around $ 20,000 or the previous all-time high in late 2017.
Why is Bitcoin consolidating bullish with low volatility?
Bitcoin is usually on top or sees a major correction when long-time owners start selling quickly.
In previous bull cycles, the sell-off of HODLers who took profits on their positions resulted in a rapid 50% decline, causing the entire cryptocurrency market to pull back sharply in a short period of time.
This trend is consistent with the fact that HODLers are not selling a significant amount of BTC, which suggests that the top may still be a long way from being reached.
Bitcoin’s stabilization at around $ 55,000 is extremely optimistic for two main reasons. First, BTC has maintained a strong market structure despite some headwinds. Second, BTC’s tight consolidation below an all-time high is technically a positive sign.
For the past two weeks, Bitcoin has faced major threats that could have catalyzed a serious short-term downturn.
The US Treasury Department’s yields rose sharply. This often causes technology stocks to decline, negatively affecting all risky markets.
In addition, as explained by Ki Young Ju, CEO of CryptoQuant, miners hold a lot of Bitcoin that they haven’t sold in the past few months. In fact, the amount of BTC moved by miners was significantly less compared to previous withdrawals this year. This could suggest that miners are likely to expect higher prices in the future.
On March 17, Ki also identified three other factors that are based on trends in the chain and that could contribute to a stagnant uptrend for Bitcoin. He wrote at the time:
“I think $ BTC would take some time to build another leg in terms of demand / supply. 1 / Too many $ BTC stocks in USD compared to stable Bitcoin stocks on spot exchanges. 2 / BTC market cap is too great to get another leg using market capitalization alone for stable coins. No significant USD spot inflows – neutral coin base premium and negative GBTC, QBTC premium. “
Despite the risks mentioned above, Bitcoin has performed relatively well, avoiding a drop below $ 50,000.
Is the BTC floor in there?
Well-known pseudonymous traders, including “Rekt Capital”, have said that there could be sufficient confirmation in the next few days that a bitcoin bottom could form.
It is difficult to predict when the exact bottom would form, but if BTC stays above $ 55,000 for a few days and prints a “higher low” formation, the trader said a new rally could take place. He wrote:
“You will never really know when the actual # BTC bottom of the rewind is. However, you can look for ways that a potential bottom can be confirmed. If $ BTC makes a higher low in the next few days, that should be sufficient confirmation for its the ground is in. “
As long as the price of Bitcoin is above $ 55,000 in the short term, the higher low education would be intact when the market enters April, a historically bullish month that has not been in the red since 2015.