Bitcoin holders swap positions: Long-term sellers and short-term buyers shape market trend

• Long-term Bitcoin holders are selling, while short-term holders are accumulating, indicating a market trend.
•  On-chain data suggests Bitcoin price hit its lowest point, with a recent uptick in short-term holder metric and undervalued 18-month to 2-year-old Bitcoin.

One way to gauge whether we’re approaching a market peak or trough is by observing the fluctuations in Bitcoin [BTC] holdings. A new market trend was observed where long-term holders of BTC divest, while short-term holders stock up. So, what implications does this have for the price of BTC? 

Read Bitcoin (BTC) Price Prediction 2023-24

Bitcoin Long and short-term holders swap positions

According to data from CryptoQuant, there has been a recent uptick in the Bitcoin Short-Term Holder SOPR metric. This trend has persisted for most of the year, with the current SOPR level hovering around 1.04.

In contrast, the Long-Term Holder SOPR also exceeded 1, but its value decreased recently. The decline in the holdings of BTC aged between 18 months and two years typically occurs as the price stabilizes before surging to reach a market bottom. 

As the market cycle advances and Bitcoin’s valuation increases, these older holders begin to sell their coins, decreasing their overall holdings.

This information can be gleaned from the BTC UTXO age band of 18 months to 2 years. Conversely, the holdings of short-term Bitcoin holders, which are less than six months old, tend to increase after prices reach their lowest point and continue to rise alongside prices, which is the current state of affairs.

Source: CryptoQuant

Bitcoin short and long-term MVRV

During previous market lows, the supply of 18-month to 2-year-old Bitcoins held by their owners typically increased when BTC was undervalued (as indicated by an MVRV ratio mostly below 1).

Currently, the two-year MVRV ratio showed that coins within that age range were undervalued and below zero, with a value of -3.2% as of this writing. 

Source: Santiment

In contrast, short-term BTC holders tend to accumulate coins after the price has hit its lowest point, as is currently the case, and continue to do so as the price increases (as reflected by a rising MVRV ratio). As of this writing, the 180-day MVRV ratio stood at 29.66%.

Current price trend on a daily timeframe

 Bitcoin was still struggling to surpass the psychological barrier of $30,000 at press time. However, over the past 48 hours, it was on an upward trajectory in the daily timeframe.

How much are 1,10,100 BTCs worth today

As of this writing, Bitcoin was trading at approximately $29,200, with a gain of less than 1%. Furthermore, it was trending above the neutral line on the Relative Strength Index, indicating a bullish trend.

Based on Bitcoin holdings and other relevant metrics, on-chain data suggests that the price has reached its lowest point.

Source: TradingView