Last Updated: 17 August 2022
Short-term investors in bitcoin are buying up a signal that the bottom is in sight. The analysts at Glassnode are talking about an ‘accumulation peak’ among so-called short term holders (STH). These are people who have historically held their bitcoin for no longer than 155 days.
According to Glassnode’s analysis, this group has increased its holdings by 330,000 bitcoin since the price fall in May and June. Apparently, they see a price of $20,000 as a short-term opportunity to make a profit and buy the ‘dip.’
After a dramatic capitulation event, the ownership structure of #Bitcoin has been reshaped.
— glassnode (@glassnode) August 15, 2022
The question is: Who did this group buy the coins from? As we know, around 900 new bitcoin come into existence every day, but not every coin comes onto the market. Of all the mined coins, only a quarter are available on the market, while the rest are held or lost.
According to Glassnode’s weekly report, the short-term investor group (STH) has mostly bought from the long-term holders (LTH). Because among the long-term investors, there has actually been an outflow of around 200,000 bitcoin since May this year.
The analysts conclude: ‘Short-term investors stepped in during the price crash this year and now own bitcoin at a much lower purchase price.
In Glassnode’s on-chain definition, an entity is classifiable as an LTH after 155 days before it is considered an STH. So suppose someone bought bitcoin on May 15, then as of October 15, they are a long-term holder as long as they do not sell.
However, there is a trend change, as normally short-term speculators buy at average higher prices. This may indicate that there is now a new group buying bitcoin for the first time, but at a lower price than what one would normally do (towards the FOMO peak).
If this trend continues, most of the price pain seems to be out of the market, the Glassnode researchers conclude. Other analysts are also becoming more bullish. Plan B, for example, expects a ‘price explosion,’ and the analysts at Whalemap see more activity among whales, which could bring the price to $27,000 in the short term.
Dutch analyst Michaël van de Poppe also sees bitcoin holding strong while smaller coins are losing value. Can the currency hitch a ride with the stock market recovery?
#Bitcoin looking strong on holding support here. Altcoins are weaker, as they are showing a 10% correction.
Still very natural.
— Michaël van de Poppe (@CryptoMichNL) August 16, 2022
The Mayer Multiple is a tool for predicting tops and bottoms, and this indicator is — still — at a fairly low level. The score is calculated by dividing the current bitcoin price by the 200-day moving average. A value of 0.73, still well below 1, means that — based on historical performance — bitcoin is relatively cheap.
— ChartsBTC (@ChartsBtc) August 15, 2022
The daily chart of bitcoin shows an upward trend, which is hopeful for the short term. Always keep that in mind that, ultimately, market events can cause bitcoin as a small asset to rise (hard) or fall.