Bitcoin holders are increasingly returning to a HODLing strategy, according to a recent report by analytics firm Glassnode. This shift marks a departure from the months of heavy selling pressure that followed Bitcoin’s all-time high earlier this year.
Market Shift Toward Accumulation
After experiencing the largest downtrend of the current cycle, the Bitcoin market is showing signs of recovery. Despite the ongoing uncertainty among digital asset investors, Glassnode’s analysis reveals a notable shift toward HODLing and accumulation. The report highlights that the market is currently in a phase of “digesting” the recent downturn, with accumulation trends becoming more evident.
The Glassnode report noted that the recent sell-off, which saw Bitcoin’s price drop from its March peak of $73,737, led to a period of extensive supply distribution across wallets of all sizes. However, over the past few weeks, early indicators suggest that this trend is reversing, particularly among the largest wallet holders, which are often associated with exchange-traded funds (ETFs). These large wallets appear to be resuming an accumulation strategy, signaling renewed confidence in Bitcoin’s long-term value.
Accumulation Trend Score Hits Peak
Glassnode’s Accumulation Trend Score (ATS), a metric that assesses weighted balance changes across the market, has reached its highest possible value, indicating significant accumulation over the last month. This score suggests that investors are increasingly choosing to hold onto their Bitcoin rather than sell, contributing to a shift in market dynamics.
Long-Term Holders Reassert Their Conviction
The report also highlights a significant behavioral change among Long-Term Holders (LTHs). After heavy divestment during Bitcoin’s climb to its all-time high, LTHs are now shifting back to HODLing. Over the past three months, approximately 374,000 BTC has moved into LTH status, indicating a growing propensity among investors to hold their coins despite market fluctuations.
The report attributes this change in behavior to the “choppy sideways price action” observed in recent months, which has led to a slowdown in selling pressure from LTHs. As a result, the wealth held by LTHs has stabilized and begun to grow again, remaining historically elevated compared to previous market cycles. The analysts note that LTHs are increasingly unwilling to sell their coins at lower prices, even in the face of sideways or downward trading.
Potential for Future Divestment Pressure
Despite the current accumulation trend, Glassnode warns that there is still potential for further divestment pressure from LTHs if Bitcoin’s price appreciates significantly. The LTH Sell-Side Risk ratio is currently lower than in previous market cycles, suggesting that the profit-taking among LTHs has been relatively modest. However, should the BTC price rise substantially, LTHs may be tempted to sell, leading to increased selling pressure.
Bitcoin’s Price Climbs Back Above $60,000
As of Wednesday morning (UTC), Bitcoin has climbed back above the $60,000 mark, trading at $60,795 after appreciating 2.6% in the past day. Over the past week, Bitcoin’s price has increased by 6.9%, although it remains down 3.1% over the past month. Despite these fluctuations, Bitcoin is up 107% over the past year, demonstrating the resilience of the cryptocurrency in the face of market challenges.
Overall, the report from Glassnode suggests that the Bitcoin market is entering a new phase of accumulation, with long-term holders displaying renewed conviction in the cryptocurrency’s future prospects.
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