Is Bitcoin Surrender Over? Short-term holders have bought 330,000 BTC since the Terra collapse

For the first time in more than two years, short-term holders (STH) have become more active in the BTC market than long-term holders (LTH), according to analytics platform Glassnode. The company's latest market report claims that this could indicate that capitulation in the cryptocurrency sector is behind us.

Short-term holders they added 330,000 BTC since the Luna collapse

The Terra ecosystem imploded in early May when the native algorithmic stablecoin UST lost parity with the dollar. Opportunistic traders took advantage of the way the stablecoin was structured and linked to LUNA, eventually causing the prices of both assets to drop to mere pennies.

In addition to over $60 billion in LUNA and UST's market capitalization, this collapse had a serious impact on the entire crypto industry. The entire market began to crash, causing BTC to drop more than $10,000 in a few days to a one-year low.

Such extreme volatility, especially when riskier assets fall in value, reveals the nature of investors. Typically, those with higher conviction (considered long-term holders or investors who have also experienced bear markets in the past) tend to hang on, while short-term holders rush to divest their assets, very often at a loss.

Latest message However, Glassnode has shown that they have now taken a different stance. Since the unfavorable development in early May, the supply of long-term holders has increased by more than 330,000 BTC.

This usually only happens during bull markets because STHs buy at the top and sell at the bottom. There are only a few examples where they have accumulated during price retracements, the most recent of which was during the March 2020 COVID-19 crash.

Is Bitcoin in Distribution or Accumulation Phase?

Glassnode explained that primary cryptocurrency is usually found in distribution or accumulation cycles. The former is a characteristic of a bull market because investors are motivated to realize profits, while the latter usually occurs in bear markets.

Currently, the metric showing current sentiment - ​​Supply Active 1+ Years - is just below the previous ATH recorded in May of this year at 65 %. According to the analyst firm, "this underscores significant buyer confidence in May-July 2021 following a large miner migration," which can be seen as "constructive mechanics in a bear market."

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All content in this article is for informational purposes only and does not in any way serve as investment advice. Investing in cryptocurrencies, commodities and stocks is very risky and can lead to capital losses.