Bitcoin rejects nearly $ 37.5,000, with on-chain data showing surrender from short-term holders

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Bitcoin started the week with an abrupt bullish breakout to $ 37,500, a level some analysts have identified as a crucial “line in the sand,” but the rally was short-lived as BTC was near the lower arm of the Bearish pennants have been seen for several time periods.

While many traders are concerned that the 2021 bull market is now over and are considering whether to secure profits, data on the chain shows that long-term Bitcoin (BTC) holders have amassed in preparation for a potential 2013-style double pump that has the potential to take BTC to a new all-time high.

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BTC / USDT 1-day chart. Source: TradingView

Ether (ETH), on the other hand, rose 8% to $ 2,677 as the talk of a possible “flip” between Bitcoin and Ethereum continues to be a topic of discussion. Most recently, Bloomberg speculated that ether could one day surpass Bitcoin as the world’s preferred cryptocurrency.

Short-term owners feed the sellout

For more insight into what is fueling the uncertainty in the markets, see Glassnode’s latest Week on-chain report, which examined the activity of Short-Term Holders (STH), who are newer entrants holding coins younger than 155 days and long-term holders (LTH) who hold coins that are more than 155 days old.

According to the Average Spent Output Lifespan (ASOL) metric, which provides insight into the average age of all UTXOs issued that day, LTHs lasted mainly during the most recent slump, driven by a dramatic decline in ASOL “back to levels below the accumulation range between 50,000.” and $ 60,000. “

The average spend life of Bitcoin. Source: Glass knot

Further evidence that STHs are behind the sell-off can be found by comparing Profitable Bitcoin Transfer Volume (LTHs) to Loss (STHs) in the chain.

According to data from Glassnode, LTHs took profits from $ 10,000 to $ 42,000 at the start of the 2021 rally before spending “hit a fairly stable baseline,” with last week’s sell-off “having little effect on their spending patterns,” suggesting , “That LTHs are generally unwilling to liquidate coins at reduced prices.”

This compares to the behavior of STHs who “increased their spending more than five fold during this sell-off, with maximum spending near the current local market low”.

Evidence of this can also be found in a review of the Spent Output Profit Ratio (SOPR) for STHs that continue to realize losses by spending coins accumulated at higher prices at the current lower prices, suggesting surrender.

Short term Bitcoin holder SOPR. Source: Glass knot

According to Glassnode: s

“Without a doubt, the current structure of the market can best be described as a battlefield between bulls and bears, with a clear trend between long-term and short-term investors. This is a battle of HODLers’ conviction and immediate purchasing power. “

The views and opinions expressed are those of the author only and do not necessarily reflect the views of Cointelegraph.com. Every step of investing and trading involves risk, so you should do your own research when making a decision.