Hello my fellow bloggers! As market shows us a sea of red, I want provide you with some data, which will help you to decide if this is a healthy correction before another pump or market is going to revert to a bearish trend. Let’s dive in and investigate.
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Bitcoin price depends on holders’ position. When people believe in BTC uptrend, hodlers accumulate BTC on their wallets for long term. These type of investors, true believers of Bitcoin, tend to hold their BTC for 3-5 years. When the price pump, hodlers choose to take some profits on local highs. When too many hodlers at a time choose to sell BTC to a short term holders (new investors and traders), the market reaches its top and reverse to a bearish trend. On the chart, it looks like this:
As you can see, at this point around 13% of BTC is still in hands of hodlers. We don’t see them dumping BTC yet. This is a signal uptrend will continue after a correction, if you believe the same pattern will replicate itself again in this bullrun. Glassnode has a chart showing Hodler net position change:
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The most interesting thing to find on the chart is difference between January correction and current market deep. As you can see, when price dumped from 40k t0 32k in January 2021, a good number of Hodlers chose to sell. This time the spike is much smaller. In other words, more hodlers believe the uptrend will continue. The same happens with miners:
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Fewer miners dump BTC these days. I assume miners also believe the price will go up so that they can sell with a bigger profit. This all for today. Let me know what you think in comments below!
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Disclaimer
I’m not a financial of any kind. I encourage you to check all information yourself and make decision only based on your own opinion. All articles are created for solely entertainment purpose.
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