Bitcoin’s short-term holder positioning suggests an extended market uptrend, with over 4 million BTC accumulated since September. This accumulation outpaces distribution by long-term holders, indicating potential room for growth in the current cycle.
Since September, short-term holders have accumulated over 1.5 million ‘bitcoin’.
Bitcoin accumulation refers to the process of buying and holding a significant amount of bitcoin over time.
This strategy is often employed by investors who believe in the long-term value and potential of the cryptocurrency.
According to a study, 75% of all bitcoin transactions are less than $100, indicating that most users are using it for small purchases rather than investing.
In contrast, institutions and whales tend to accumulate large amounts of bitcoin, which can drive up its price.
Short-Term Holder Accumulation Outpaces Distribution by Long-Term Holders
According to Glassnode, short-term bitcoin (BTC) holders (STHs) have added 1.5 million ‘bitcoin’ since September, taking the total to over 4 million ‘bitcoin’. This equates to an average accumulation of approximately 300,000 BTC per month. During this period, ‘bitcoin’ surged from $60,000 to $109,000 before pulling back below $100,000.
Historical Context Suggests Room for Growth
Glassnode defines STHs as those who have held ‘bitcoin’ for less than 155 days. Historically, in previous bull market cycles, ‘bitcoin’s’ price tends to peak when STHs exhaust their buying momentum, leading to a slowdown in price appreciation. This pattern has played out in 2013, 2017, and 2021.
However, STHs held significantly more ‘bitcoin’ at these cycle peaks: 5 million BTC in 2013, 6.2 million BTC in 2017, and 4.6 million BTC in 2021. Compared to the current 4 million BTC, the current STH holdings are relatively low, suggesting that new market entrants could continue accumulating, meaning the cycle may still have room to grow.
Short-term holders, also known as short-term investors, are individuals or entities that hold securities for a period of less than one year.
They often engage in active trading strategies to profit from market fluctuations.
According to the Securities and Exchange Commission (SEC), approximately 70% of publicly traded companies' shares are held by institutional investors who act as short-term holders.
This group includes hedge funds, pension funds, and other investment firms that frequently buy and sell securities within a short timeframe.
Long-Term Holder Distribution Contributes to Stalled Price Action
Meanwhile, long-term holders (LTHs) — investors who have held ‘bitcoin’ for more than 155 days — have distributed 1.2 million BTC during the same period. This indicates significant profit-taking following ‘bitcoin’s’ strong rally since November. The continued offloading by LTHs has been a major factor in ‘bitcoin’s’ stalled price action since mid-November.
