Over the past week, the price of Bitcoin has risen nearly 9 percent, with the crypto brand at around $ 61,000 at press time. With the price still pretty close to its previous ATH, many more price discoveries await from the world’s largest cryptocurrency. However, this also begs the question: is it likely that current buyers of BTC will give in and become sellers?
While BTC has seen tremendous upward momentum in recent months, crypto also had to deal with price corrections according to previously set ATHs. BTC still has the support of dedicated hodlers, but this has not kept the price immune from short-term price corrections.
Interestingly, the data provided by Glassnode indicated that chopped coins are now maturing to achieve long-term holder status. To add context, it’s also important to take a look at the metric for changing liquidity supply from BTC.
Source: Glassnode
The fluid position change metric shows the rate at which coins exceed the fluid too illiquid threshold. This metric shows in red the coins that have been hoe and are unlikely to be sold. However, once a certain threshold is reached, the trend is reversed and coins are sold again [shown in green].
According to the metric, a move from illiquid to liquid last happened in December when the ATH was breached in 2017 as many traders believed that Bitcoin had peaked. The coming months and increasing belief in the coin’s long-term prospects have turned this phenomenon around, resulting in increased scrum. However, will there be another trend reversal if BTC climbs to another high?
Source: Glassnode
Bitcoin HODLer Position Change can also provide context and clarity for the current market that BTC is in. The HODLer Position Change metric tends to be higher right now and given the massive amounts of BTC purchased by institutional investors in 2021 [provided they continue to hold on to the digital asset]This trend is unlikely to change.
According to the data, Hodler spending dropped dramatically from the second half of January 2021.
Source: Glassnode
In addition, Glassnodes Coin Years Destroyed (CYD), which tracks the number of coin days destroyed in the last 365 days, provides a cyclical indicator to determine if there was any spending or HODLing in the last year.
Interestingly, a high or spike in the CYD indicated that a lot of old coins had been issued in the past year and currently the CYD is trending higher. However, this is only closer to 2013 levels when Bitcoin saw a sharp price correction that was quite a long way from the 2017 peak.
As Bitcoin seeks to go beyond its current ATH and approach the $ 65,000 range, investors only need to worry about a price correction if Hodler spending increases dramatically. Since this is contrary to the current trend, it is unlikely that many buyers in the current market will turn into sellers.
As a result, traders are largely safe even if Bitcoin ventures into the $ 61,000- $ 65,000 price range. This is the case provided there is no whale-related sell-off.
Sign up for our Newsletter
Comments are closed.