- There has been an increase in the inflow volume of BTC long-term holders.
- This suggests that these investors are now taking profits.
Leading coin Bitcoin [BTC] may witness a short-term price correction as on-chain data indicates a movement of coins from long-term holders (LTHs) to short-term holders (STHs).
In a new reportCryptoQuant analyst Yosei Dent reviewed the coin’s exchange activity and found that when it crossed the $51,000 price mark on February 14, there was a surge in the number of long-held BTCs transferred to exchanges.
LTHs pause to make a profit
According to Dent:
“Once BTC crossed the $51,000 mark on the 14th, 5,153 BTC from the 6 to 12 million age range flooded into the exchanges.”
Dent added that BTC holders in this investor cohort acquired their coins during the 2023 bull market run, which began in October and saw the coin’s value end the trading year at a multi-month high of $42,000.
Moreover, on the same day, the inflow volume on the exchange from coin holders who have held their BTCs for three to five years briefly increased to 2,123 BTC.
Source: CryptoQuant
According to Dent, most of these investors bought their coins during the 2019 to 2021 bull run. Therefore, the recent spike in the currency’s inflow volume suggested they were taking profits.
“Given that the BTC price was $48,000 on February 14, 2021, it appears that some of the 3-5 year cohort investors exited the market at their breakeven point,” Dent said.
When BTC sees an increase in currency inflows from these investor cohorts, it suggests that coins are moving from the hands of LTHs to STHs.
This movement is often accompanied by a price drop. This is because STHs are often ‘weak hands’, having their coins ready to sell at any hint of negative sentiment.
However, Dent noted:
“However, compared to the LTH Exchange Inflow in previous cycles, this scale is relatively small.”
Many BTC holders are “above water”
At the time of writing, BTC exchanged hands for $51,245, according to CoinMarketCap. In the past month alone, its value has increased by almost 30%.
Read Bitcoin’s [BTC] Price forecast 2024-2025
Of all addresses with BTC, 92.23% are considered to be ‘in the money’. This means that they currently hold the most important asset at a profit.
On the other hand, 5%, consisting of 2 million addresses that are currently holding their BTCs at a loss. These holders acquired their coins when BTC was trading between the $52,000 and $67,000 price range.
Source: IntoTheBlock