Bitcoin selling saw a notable increase last week as prices remained stuck between a low of $37,274 and a high of $42,455.
Bitcoin and Ethereum have held the market monopoly, with newcomers looking out for the top two tokens as their market cap expanded. However, with bitcoin’s recent consolidation in play, new investors seem to be a little skeptical of hopping on the BTC bandwagon.
The last week saw BTC long-term holders increase their spending, suggesting that the cohort de-risked from the market. Nonetheless, HODLing remained the most sought-after investing strategy as bitcoin oscillated 43.71% down from its all-time high.
Fresh data from Glassnode highlighted that bitcoin accumulation trends have mellowed down in the short term, even though long-term demand trends remain incredibly constructive.
The bitcoin accumulation trend score is a metric that monitors the big picture of aggregate accumulation or distribution of investor wallets. The metric thus tracks when large entities and large portions of the market add to their coin holdings while filtering out miners and exchanges.
Bitcoin accumulation trend score for most of 2022, has highlighted the impact of global macro uncertainty on investor sentiment. It also presented a weaker accumulation trend taking place as a result of the market uncertainty.
That said, the short-term supply of BTC is currently near all-time-lows which is constructive for prices. However, 82% of coins held by short-term holders, equivalent to over 2.51 million BTC, are presently held at a loss.
The short-term supply in loss could be the most likely source of sell-side pressure in the near term.
Over the last week, there was an increase in older coins being spent, indicating a more bearish tilt in sentiment within the HODLer class. Coins older than six months represented 5% of all spending volume last week, a considerable uptick from recent months.
That said, bitcoin saw a relatively slow price action last week, with BTC’s price sticking around the $40,000 mark for most of the week. As highlighted previously by FXEmpire, after a downside break below $38,000, BTC found support near $37,500.
BTC started a decent recovery wave above the $38,000 level a couple of days back. The price is stuck under the crucial $39,400 resistance as BTC trades at $38,695 at press time.
All in all, data suggests there is a possibility of a capitulation event but that is yet to manifest as it has in previous market cycles.
A Journalism post-graduate with a keen interest in emerging markets across South East Asia, Varuni’s interest lies in the Blockchain technology. As a financial journalist, she covers metric and data-driven stories with a tinge of commentary, and strongly believes in HODLing.