According to the data extracted from the Glassnode analytics vendor, the Short-Term Holder SOPR index for Bitcoin has dropped below 1 since approximately May 15, 2021. In addition, long-term holders are investing in the flagship digital currency for future use.
Long-Term Holders Are Accumulating Bitcoin
According to the Glassnode chart, long-term investors are benefiting from the current situation by collecting Bitcoin from short-term investors who are selling their cryptocurrency out of panic. Similarly, the total Bitcoin supply held by investors such as Whales and financial institutions has significantly increased compared to the first seven months of 2021. On the other hand, Michael van de Poppe, a famous analyst based in Amsterdam, tweeted, “Bitcoin didn’t hold $35K, but holding the crucial area around $33K (mentioned earlier). Therefore, breaking $35K is vital for further upwards momentum. If that happens, I’m suspecting $38K as the next point of interest.”
Bitcoin Supply on Exchanges Hits Six-Month Low
The amount of Bitcoin supply on exchanges has dropped its price by 47%, hitting a six-month low. However, according to Santimant, “The ratio of Bitcoin’s supply on exchanges has encouragingly slid down to its lowest since early January. The 6-month low is a promising sign, as it generally will indicate that there is a decreased risk of more major BTC selloffs.” Therefore, the decline in Bitcoin held on exchanges is considered from a positive perspective, indicating a lower rate of major sell-offs as observed in the past few months.
According to the data chart shared by Sentiment analytics agency, investors such as Whales are buying Bitcoin. In contrast, the short-term holders are selling their Bitcoins due to the price of Bitcoin falling to $34,000. Therefore, Bitcoin supply within the centralized exchanges has dropped down to its lowest level in 2021. In addition, the amount of withdrawal of Bitcoins by its long-term holders is equivalent to its value observed in November 2018. Similar insights can be observed in the ETH supply remaining on digital trading venues. As a result, the chances of possible sell-offs have significantly reduced due to the recent price drops in the near future.
Exchange inflows began to rise at the starting of May 2021, which resulted in Bitcoin’s steep selloff by the middle of the month. However, the Bitcoin selloff went higher on May 19, suggesting a $1.2 trillion decline for the entire cryptocurrency market. Despite observing a firm intermediate downtrend, investors are looking for reasons to be bullish. However, analysts have an uncertain outlook in the short-term, looking forward to a steeper correction this year.
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