Seasoned Crypto Investors Continue to Accumulate Bitcoin Amidst Dormant Market
Despite the fluctuating price of Bitcoin, long-term holders or “hodlers” are steadily accumulating the cryptocurrency, according to a report by blockchain analytics firm Glassnode. These investors, who have held their coins for at least 155 days, are withdrawing over 50,000 BTC from exchanges each month. This withdrawal of coins from exchanges indicates a tightening supply and a reluctance among seasoned investors to trade in the current market conditions.
Glassnode’s report also highlights the current state of low liquidity in the market, similar to previous bear markets. The value transferred onchain and the influx of new capital into the Bitcoin network are at multi-year lows. Exchange activity is also experiencing a significant decline, with total exchange volume down 75.5% from its all-time high in May 2021.
“The volume of Profit and Loss realized by coins sent to Exchange Addresses has also experienced a complete detox from the 2021-22 cycle, with both measures hitting the lowest levels seen since 2020,”
Identifying Peak Altcoin Speculation
Glassnode has introduced a model to identify periods of explosive altcoin speculation by assessing risk-on and risk-off environments through capital rotation. Currently, this model does not show increasing rates of capital rotation from Bitcoin to Ethereum and stablecoins, which is typically seen during an “altseason mania.”
According to Glassnode, the wild swings in altcoin prices are more a result of low liquidity than genuine risk-on sentiment. Meanwhile, hodlers are actively accumulating BTC in anticipation of a future bull surge. With the next reward halving just months away, the supply squeeze is expected to intensify further.
Hot Take: Seasoned Crypto Investors Continue to Accumulate Bitcoin as Market Remains Dormant
Despite the lack of activity in the broader digital asset market, seasoned crypto investors are taking advantage of the dormant conditions to accumulate Bitcoin. Glassnode’s report reveals that these long-term holders are withdrawing significant amounts of BTC from exchanges each month, tightening the supply. The market is experiencing low liquidity, with both value transferred onchain and new capital inflow at multi-year lows.
While altcoin prices continue to swing wildly, Glassnode’s model suggests that this is due to low liquidity rather than genuine risk-on sentiment. Hodlers are eagerly accumulating BTC, anticipating a future bull surge. With the upcoming reward halving, the supply squeeze is expected to intensify even further.
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