- Short term holders dumped their coins on exchanges at a loss.
- Long-term holders have accumulated a significant amount of BTC in the past 24 hours.
On-chain analytics company Glassnode took to Twitter to draw attention to Bitcoin’s exchange transfer patterns [BTC] short-term holders (STH) and long-term holders (LTH).
Read Bitcoin [BTC] Price Forecast 2023-24
The analysis showed that most currencies entered the exchanges at a loss on average with a negative inflow bias of 0.7.
When assessing the gain/loss ratio (bias) of #Bitcoin deposit volume to exchanges, we see a current negative bias of 0.7 suggesting that coins are flowing to exchanges at a loss. pic.twitter.com/6dYAbsFdyg
— glassnode (@glassnode) May 25, 2023
However, when the exchange inflow bias was examined based on holding duration, a major difference emerged between the STH and LTH.
Weak hands surrender?
Long term holders are those participants who hold coins for more than 155 days. This cohort of users, colloquially referred to as “diamond hands,” is believed to have a high risk tolerance and fail to sell despite long-term losses.
This group registered a positive price inflow bias of 1.73, implying that most of their transfers to exchanges generated profits.
Source: Glassnode
On the other hand, short-term holders, who held coins for less than 155 days, registered a negative bias of 0.69, indicating that these “weak hands” dumped their coins on exchanges at a loss. STH is more likely to give up positions due to market volatility.
It was also interesting to note that this cohort was the main contributor to the total exchange inflow.
Source: Glassnode
Diamond hands were profitable
Examination of the 30-day MVRV ratio revealed that holders of BTC were under water and would average losses of 4.53%. However, the MVRV Long/Short Difference was positive meaning that LTH would realize higher profits compared to STH.
This observation was consistent with the aforementioned divergence in the profitability of the two cohorts.
Source: Sentiment
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Long-term holders are starting to pile up
Much of the LTH likely accumulated more BTC coins, as evidenced by the sharp spike in the flow of tokens that has not moved over the past year. Because the transactions resulted in a price increase, it was possible to predict that they would be dominated by buyers.
Source: Sentiment
At the time of publication, BTC was exchanging hands for $26,496.51, according to CoinMarketCap. The king coin has entered a phase of consolidation, with trades over the past week fluctuating within the narrow range of $26,400 – $27,500.
