- A new report suggested that long-term Bitcoin holders have been selling off their positions.
- Despite this, retail and large investors showed interest in the king coin.
According to data gathered by nino from CryptoQuant, the prices of Bitcoin [BTC] faced high volatility after CPI and FOMC. After this, there was a major spike observed in its Long Term Output Profit Ratio. This suggested that many long-term Bitcoin holders sold their positions and took profits.
Read Bitcoin’s [BTC] Price Prediction 2023-24
However, even though long-term holders seemingly lost their faith in BTC, retail investors have shown an interest in buying the king coin at a discount.
New money, old coin
Based on data provided by Glassnode, it was observed that the number of addresses holding over 0.1 coin had increased over the last few months and reached an all-time high of 4.16 million addresses.
During the same time period, addresses holding over one coin reached an all-time high as well. This suggested that even though long-time holders had exited their positions, new traders and investors were still willing to buy more Bitcoin.
— glassnode alerts (@glassnodealerts) December 18, 2022
However, despite the growing interest from all types of investors, the activity on Bitcoin’s network declined.
Data gathered by Santiment revealed that the daily active addresses on Bitcoin‘s network decreased significantly over the past week. Coupled with that, the velocity of the BTC fell as well. This indicated that the frequency with which Bitcoin was being exchanged amongst addresses had declined.
Another alarming factor was Bitcoin’s sharp decline in terms of volume, which fell from 27.5 billion to 12.5 billion over the past 30 days.
Despite the declining activity and volume, traders remained optimistic about the future of Bitcoin.
The ‘Trade’ mark of Bitcoin
According to data provided by Coinglass, the number of traders that had taken long positions on Bitcoin had increased materially. After 16 December, the number of long positions for Bitcoin started growing. At press time, 63% of the top traders on Binance had taken long positions in favor of Bitcoin.
Although traders might make a profit in the coming future, BTC holders would still have to wait to make a profit.
Due to Bitcoin’s falling prices, the coin’s Market Value to Realized Value (MVRV) ratio declined. This implied that if BTC holders made a decision to sell, they would suffer losses.