- Long-term Bitcoin holders sell, while short-term holders accumulate, indicating a market trend.
- On-chain data suggests that the price of Bitcoin has bottomed out, with a recent surge in short-term holders and undervalued 18-month-to-2-year-old Bitcoin.
One way to gauge whether we are approaching a market peak or trough is to observe the fluctuations in Bitcoin [BTC] businesses. A new market trend was observed where long-term holders are divesting from BTC while short-term holders are stockpiling. So, what implications does this have for the price of BTC?
Read Bitcoin (BTC) Price Prediction 2023-24
Bitcoin Long and short term holders switch positions
According to data from CryptoQuant, there has been a recent increase in the Bitcoin Short-Term Holder SOPR metric. This trend continues for most of the year, with the current SOPR level hovering around 1.04.
The Long running holder SOPR also exceeded 1, but its value has recently fallen. The decline in holdings of BTC aged between 18 months and two years usually occurs when the price stabilizes before rising to reach a market bottom.
As the market cycle progresses and Bitcoin’s valuation increases, these older holders begin to sell their coins, reducing their total holdings.
This information can be derived from the BTC UTXO age range from 18 months to 2 years. Conversely, the holdings of short-term Bitcoin holders, who are less than six months old, tend to rise after prices bottom out and continue to rise alongside prices, which is the current state of affairs.
Source: CryptoQuant
Bitcoin short and long term MVRV
During previous market lows, the supply of 18 month to 2 year old Bitcoins held by their owners typically increased when BTC was undervalued (as indicated by an MVRV ratio that is usually below 1).
Currently, the two-year MVRV ratio showed that coins within that age range were undervalued and below zero, valued at -3.2% at the time of writing.
Source: Sentiment
By contrast, short-term BTC holders tend to accumulate coins after the price bottoms out, as is currently the case, and continue to do so as the price rises (as reflected by a rising MVRV ratio). At the time of writing, the 180-day MVRV ratio was 29.66%.
Current price trend on a daily time frame
Bitcoin was still struggling to cross the $30,000 psychological barrier at the time of writing. However, in the past 48 hours, it has been on an upward trajectory in the daily time frame.
How much are 1,10,100 BTC worth today
At the time of writing, Bitcoin was trading at around USD 29,200, with a gain of less than 1%. In addition, it is trending above the neutral line on the Relative Strength Index, indicating a bullish trend.
Based on Bitcoin holdings and other relevant metrics, on-chain data suggests that the price has bottomed out.
Source: TradingView
