0
0
Bitcoin’s Sell Pressure Eases as Long-Term Investors HODL
Bitcoin’s sell pressure has significantly decreased compared to two months ago, with more long-term investors choosing to hold onto their BTC for extended periods, as reported by the crypto analytics firm Glassnode.
Value Days Destroyed Multiple Indicates Shift to Accumulation
According to Glassnode’s lead analyst James Check, Bitcoin’s “Value Days Destroyed (VDD) Multiple” has experienced a substantial cooldown in recent weeks, signaling a return to accumulation mode for the top cryptocurrency. The VDD Multiple measures near-term spending behavior of Bitcoin in comparison to its annual average, focusing on coins that have remained stationary for a significant period. The ratio increases when there is a high level of selling by long-term holders and decreases as investors revert to holding (HODLing) their coins.
Truly epic cooldown on the #Bitcoin Value Days Destroyed Multiple.
This is essentially indicating that old coins have stopped moving on-chain, allowing breathing space for new demand bids to hit…well…a lack of supply.
Long-Term Holders need higher prices to motivate sales. pic.twitter.com/o2g1nakJst
— _Checkmate 🟠🔑⚡☢️🛢️ (@_Checkmatey_) May 6, 2024
Long-Term Holder Behavior During Bitcoin Price Corrections
On-chain analysts assert that major Bitcoin price corrections during bull markets are often driven by long-term holders aiming to liquidate their holdings when the price surges significantly above their initial purchase price. Although the overall long-term holder supply generally increases over time, it has historically declined substantially during Bitcoin’s most notable bull runs, such as those seen in early 2021 and early 2024.
Glassnode’s data indicates that extreme readings in the VDD Multiple, surpassing 2.9, have been effective in pinpointing local and absolute tops in Bitcoin’s bullish cycle. For instance, the ratio reached extreme levels during the 2017 peak corresponding to the network’s third halving event. While the VDD Multiple spiked above 4.0 in March, it has now retreated to under 1.4.
Decrease in Long-Term Holder Spending and Whales’ Behavior
A similar trend of cooldown is evident in long-term holder spending as a percentage of Bitcoin’s total supply, dropping from nearly 5% in March to 2% in April. This decline suggests that long-term holders refrained from spending in April.
Recently, CryptoQuant CEO Ki Young Ju highlighted that active Bitcoin whales absorbed 47,000 BTC within 24 hours following a price dip below $57,000 early in May. Checkmate remarked that the price drop resembled a standard correction in a bull market and advised users to consider buying the dip.
Whales are buying the dip, but is their conviction dwindling?
🛍️Addresses holding over 1000 BTC have accumulated strongly in recent months, especially during dips.
📈Prices have increased shortly following every accumulation.
However, note that each spike in accumulation by… pic.twitter.com/OkbekJr5NC
— IntoTheBlock (@intotheblock) May 6, 2024
Bitcoin ETF Inflows and Market Sentiment
Furthermore, Bitcoin ETFs recorded $379 million in inflows on a recent Friday, breaking a seven-day streak of continuous outflows and marking a favorable day for these emerging investment products.
Image/Photo credit: source url
