Bitcoin short-term holders may be selling, but long-termers are buying it back

Quick Take

  • Bitcoin long-term holders are reaccumulating coins they had sold to short-term holders, according to onchain data.

Short-term bitcoin holders may be selling, but onchain metrics show that long-term holders have been happy to buy it back.

"Current metrics depict short-term holders offloading their assets, with long-term holders capitalizing on the opportunity to buy in again," Bitfinex analysts said in a report

The digital asset's price trajectory since the beginning of the week has reflected this pattern. Short-term holders bought in on Monday and quickly sold holdings to capitalize on the gains after the asset spiked around 3% on the same day.

"Such time capitulation by short-term holders is typical of this cohort and it continues the trend of greater long-term holder accumulation," the Bitfinex analysts said. They cited CryptoQuant data that showed "the short-term holder cohort is currently at a deficit, leading them to relinquish the very coins they earlier bought from the long-term cohort."

The world's largest digital asset by market capitalization has risen 6.4% over the past week, according to CoinGecko. It gained 0.8% on Tuesday, rising to $27,454 at 12:17 p.m. ET.

Long term holder accumulation

CryptoQuant analyst Adam Mourad, meanwhile, pointed to onchain data that showed long-term holders are accumulating and moving assets off exchanges.

"Onchain outflow data shows bitcoin is tracing a strategic path chosen by certain investors to move their BTC away from exchange platforms, and recent observations following the price surge reveal that over 10,000 bitcoins have been transferred from exchanges to cold wallets," Mourad told The Block.

Long-term holders may be gaining confidence from the macroeconomic outlook, with analysts largely expecting no rate changes at Wednesday's Federal Open Market Committee meeting, despite ongoing inflationary pressures.

August's higher-than-expected U.S. CPI, driven by a 10.6% surge in gasoline prices, will be a consideration for the Federal Reserve. Increasing fuel prices also led to a 0.7% rise in producer prices in August, the steepest jump since June 2022.

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