tradingkey.logo

Bitcoin Capital Flow Shifts to Long-Term Holders, Data Shows — Is a Bullish Rally Coming?

BitcoinistSep 11, 2024 6:18 AM

Recent market analysis has revealed a significant shift in Bitcoin capital flow from short-term holders (STH) to long-term holders (LTH).

Particularly, according to CryptoQuant analyst IT Tech, short-term investors have been selling off their positions amid recent market volatility, while long-term investors continue to accumulate.

The Current Trend In Short And Long-Term Holders

Short-term holders have seen a significant decline in their net positions over the past two weeks, according to the CryptoQuant analyst. Many of these investors have exited the market, either taking profits or cutting their losses, indicating uncertainty about Bitcoin’s short-term price direction.

Bitcoin short-term holder metric.

IT Tech highlighted that the drop in STH positions further illustrates the reduced risk appetite of these investors. This behavior reflects a common trend where less confident investors react to price swings by reducing their exposure.

In contrast, long-term holders appear to seize the opportunity created by the recent market volatility. IT Tech’s analysis shows an increase in LTH net positions, suggesting that these investors view the current price levels as attractive for accumulation.

Bitcoin long-term holder metric.

IT Tech noted:

Accumulation as a Bullish Signal: Green areas on the net position chart indicate that LTH are increasing their holdings, which is a bullish signal for the market, as LTH are often seen as more stable and confident in their investments.

The analyst added that the net position increase in LTH also indicates a broader market trend where investors with a longer outlook are capitalizing on Bitcoin’s current valuation. By increasing their holdings, long-term holders are betting on future growth.

What The Shifting Capital Means For Bitcoin

Regarding the overall implication of this capital shift, IT Tech disclosed that the shift from short-term to long-term holders presents a mixed outlook for the Bitcoin market. The analyst noted:

LTH Accumulation: Increased accumulation by LTH could lead to price stabilization and position the market for a potential rebound, while STH sell-offs may create short-term downward pressure on BTC prices.

However, according to the latest data shown by IT Tech, the implication for the LTH accumulation appears to be the one currently winning in the market.

Bitcoin holders metric.

The analyst concluded: “The data shows a clear capital flow from weak hands (STH) to strong hands (LTH), signaling a market stability.’

Bitcoin (BTC) price chart on TradingView

Featured image created with DALL-E, Chart from TradingView

Reviewed byTony
Disclaimer: The content of this article solely represents the author's personal opinions and does not reflect the official stance of Tradingkey. It should not be considered as investment advice. The article is intended for reference purposes only, and readers should not base any investment decisions solely on its content. Tradingkey bears no responsibility for any trading outcomes resulting from reliance on this article. Furthermore, Tradingkey cannot guarantee the accuracy of the article's content. Before making any investment decisions, it is advisable to consult an independent financial advisor to fully understand the associated risks.

Recommended Articles

tradingkey.logo
tradingkey.logo
Intraday Data provided by Refinitiv and subject to terms of use. Historical and current end-of-day data provided by Refinitiv. All quotes are in local exchange time. Real-time last sale data for U.S. stock quotes reflect trades reported through Nasdaq only. Intraday data delayed at least 15 minutes or per exchange requirements.
* References, analysis, and trading strategies are provided by the third-party provider, Trading Central, and the point of view is based on the independent assessment and judgement of the analyst, without considering the investment objectives and financial situation of the investors.
Risk Warning: Our Website and Mobile App provides only general information on certain investment products. Finsights does not provide, and the provision of such information must not be construed as Finsights providing, financial advice or recommendation for any investment product.
Investment products are subject to significant investment risks, including the possible loss of the principal amount invested and may not be suitable for everyone. Past performance of investment products is not indicative of their future performance.
Finsights may allow third party advertisers or affiliates to place or deliver advertisements on our Website or Mobile App or any part thereof and may be compensated by them based on your interaction with the advertisements.
© Copyright: FINSIGHTS MEDIA PTE. LTD. All Rights Reserved.