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Glassnode: Bitcoin Long-Term Holders Have Shifted To Distribution Recently

Data released by Glassnode suggests Bitcoin long-term holder behavior has shifted from accumulation to distribution recently.

Bitcoin Long-Term Holders Have Shed 222k Coins Off Their Stack Since May

As per a new report from Glassnode, the BTC long-term holders have been spending up to 47k BTC per month in recent days.

The “long-term holders” (or LTH in short) refer to the cohort of Bitcoin investors that have been holding onto their coins since at least 155 days ago, without selling or moving them.

The “LTH net position change” is an indicator that measures the net number of coins that these HODLers have been selling or buying recently.

When the value of this metric is positive, it means LTHs are accumulating right now. On the other hand, the indicator being less than zero implies this group is distributing at the moment.

Now, here is a chart that shows the trend in the Bitcoin LTH net position change over the past year:

Looks like the metric’s value has been red in recent days | Source: Glassnode’s Market Pulse, 2022-08-05

As you can see in the above graph, the Bitcoin long-term holders started showing deep distribution behavior following the month of May.

However, around three weeks ago, the LTH net position change flipped as these holders began to accumulate. At the peak of this green phase, these investors were hodling at a rate of 79k BTC per month.

But this buying spree didn’t last too long. Soon after, the LTHs again shifted back to a trend of distribution, where they sold at a rate of up to 47k BTC per month. In the past week, the selling has reduced a lot, but the metric’s values still remain red.

Because of all the selling since May, the long-term holder supply has lost around 222k BTC (as of three days ago, when the report released).

The below chart shows how the Bitcoin supply held by LTHs has changed during the last couple of years:

The value of the metric seems to have slid down in recent months | Source: Glassnode’s Market Pulse, 2022-08-05

At their all-time high in May, the LTHs held 13.559 million BTC. Since then, their supply has come down by 1.6%.

It remains to be seen what consequences the new shift towards distribution may have for the crypto. The current bullish momentum may not last too long if the selling trend from LTHs continues.

BTC Price

At the time of writing, Bitcoin’s price floats around $24k, up 4% in the last week.

The value of BTC has jumped over the last day | Source: BTCUSD on TradingView
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, Glassnode.com

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Has Bitcoin Price Found Support At A Decade-Long Trend Line?

After a volatile first half, Bitcoin price action has been grinding sideways, seeking to find some type of reliable support. Although there has yet to be a clear sign of a reversal, the top cryptocurrency by market cap might have finally found support at a ten-year-long trend line.

Complicated Technical Analysis Or This One Simple Trend Line Trick?

Technical analysis is the study of chart patterns, trading indicators, Japanese candlesticks, and other data points in an attempt to predict future price action. The very basis of most technical drawings and chart patterns begins with a simple trend line.

And while it isn’t uncommon to see analysts with a kitchen-sink worth of technical tools turned on, sometimes less is more when it comes to getting a good read on the market.

Using only one trend line, it is easy to see why Bitcoin price might have finally found some support. With nothing more than the trend line to go by, buying low and selling high has historically yielded miraculous results.

Will this nearly ten year long trend line hold? | Source: BTCUSD on TradingView.com
Has Bitcoin Price Finally Found Support At A Decade-Long Trend Line?

Bitcoin price first claimed the trend line in April 2013, just as Mt. Gox took its exchange offline to give the market time to “cooldown.” From there, each subsequent bear market in Bitcoin returned to the same trend line drawn in red.

The trend line was touched in early 2015, and again in 2016 prior to the legendary 2017 Bitcoin bull run. Although the 2018 bear market found support before it ever reached the trend line, the March 2020 Black Thursday collapse took Bitcoin price precisely to the same trend line that is still holding today.

Fast forward to June 2022 and BTC once again touched down on this trend line. July once again tapped the line, yet held strong for a second month in a row. Thus far, August hasn’t made an attempt to try again, and after two failed attempts to break below in a row, it might be time for bulls to rally.

Past rallies from the trend line have resulted in 2,200% ROI, 9,700% ROI, and 1,500% ROI, respectively.  Losing it could be catastrophic for crypto, so it is worth paying attention to, as simple as it may seem to the naked eye.  Will this decade-long trend line produce a rally, or will it finally be lost?

Follow @TonySpilotroBTC on Twitter or join the TonyTradesBTC Telegram for exclusive daily market insights and technical analysis education. Please note: Content is educational and should not be considered investment advice.

Featured image from iStockPhoto, Charts from TradingView.com

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Ethereum Crosses $1,700, But Could Return To Path Of Pain, Expert Says

Ethereum (ETH) took off over the weekend and has extended its gains during today’s trading session. The second crypto by market cap could extend its gains, as “The Merge” becomes a certainty.

The event that will complete Ethereum’s transition from a Proof-of-Work (PoW) to a Proo-of-Stake (PoS) consensus algorithm, “The Merge” has been set for September 2022. One of the most expected dates in the crypto industry, market participants seem divided on its short-term implications.

At the time of writing, ETH’s price trades at $1,770 with 3% and 5% profits over the last 24 hours and 7 days, respectively. As NewsBTC reported, $1,700 was a critical resistance zone for Ethereum as this level could provide more clues into ETH’s price direction.

If the cryptocurrency manages to flip this resistance level into support, the current bullish momentum might be sustainable and trigger a fresh bull run. The opposite might happen at ETH’s price current levels, the market could see a bear assault with new strength.

The above is based on an idea from Jarvis Labs looking at Ethereum’s 30-day returns, a metric used to measure the short-term profits and losses from crypto investors over that period. 3 weeks ago, this metric was trending toward 0% after moving in negative territory for a while.

In the past, whenever Ethereum flip its 30-day returns into positive territory, above 0%, the cryptocurrency’s price traded to the downside for a long time. Thus, why it’s critical that ETH’s price reaches higher levels.

Former Goldman Sachs employee Raoul Pal believes ETH’s price will return to a “path of pain”, in accordance with the theory explained above. Pal believes that market participants have been taking short positions expecting that ETH’s price fails to break above $2,000.

ETH’s price with important gains on the 4-hour chart. Source: ETHUSDT Tradingview
Will Ethereum Fail To Break Above $2,000?

These traders might be in for a surprise if Pal’s prediction is fulfilled as Ethereum could continue to trend upwards beyond expectations:

(…) my view is the bigger battle is around $2300 and the trend channel. Usually, correction channels like this don’t break on first attempt and correct sharply into the range first, but that is something for few weeks time possibly.

In that sense, Ethereum seems on route to fresh gains above key resistance levels, but traders should tread carefully as ETH’s price could re-test the lower channel of the following trend, as Pal said. This could place ETH’s price below its yearly lows at $900.

If that happens, will ETH see long-term bearish pressure, or can “The Merge” push it into previous highs?

ETH’s price approaching the top of a major trendline at $2,000. Source: Raoul Pal via Twitter

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US Secretary of State Tweets, Deletes Claim That Crypto Mixer Tornado Cash Is North Korea-Sponsored

U.S Secretary of State Antony Blinken raised eyebrows Monday when he tweeted that the U.S. Treasury Department had “sanctioned virtual currency mixer Tornado Cash, which is a U.S.-sanctioned, DPRK state-sponsored hacking group, used by the DPRK to launder money.” One hour and three minutes later, the tweet had been deleted and replaced with what the Treasury Department actually alleged: That Tornado Cash was used by a North Korean hacking group to launder funds.

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Market Sentiment Holds Steady As Bitcoin Aims For $24,000

Bitcoin has been holding steady over the weekend. The cryptocurrency had been able to beat the $24,000 mark last week but had retraced downward not long after. However, this retracement has not had too much of a negative impact on the sentiment toward the digital asset. As bitcoin has started upwards once more, the market sentiment has been incredibly strong. 

Bitcoin Goes For $24,000

The opening of the new week saw bitcoin start below $24,000 in the early hours of Monday. This quickly changed with a rally on a 6-hour basis that saw bitcoin add more than $500 to its value. This helped it reclaim this coveted point once more, putting it firmly above its 50-day moving average.

Now, the 50-day MA has always been an important technical level for bitcoin. It was one indication of the crash that rocked the market two months ago and the bear market trend that ensured. Since the digital asset has now beat this point, it has now converted the bearish indicators to bullish ones. It has also resulted in a reversal of the selling pressure in the market. Now, as buy pressure mounts, the value of bitcoin is expected to grow.

The recent recovery has now adequately moved the support level for bitcoin. The recent move shows that there is now significant support for BTC at $23,500, which served as a bounce-off point. Resistance for bitcoin now sits at $24,500, a level that bitcoin has been unable to beat since the crash.

BTC price exceeds $24,000 | Source: BTCUSD on TradingView.com
Sentiment Remains Positive

Crypto market sentiment has not been the best in recent months, but there have been some remarkable recovery over this time. When the market crash happened back in June, sentiment had plunged far into the extreme fear territory, keeping investors from actually making any meaningful moves in the market.

However, with the turn in the price of bitcoin, the market sentiment has begun to change. It had grown into the fear territory and is currently sitting at a score of 30 on the Fear & Greed Index. This shows steady sentiment in the market, which is starting to skew more into the positive.

With this return of faith in the market has come more investments. Exchange outflows for last week show that investors are starting to accumulate the coin, especially among smaller investors, with the number of addresses holding at least 1 BTC reaching a new all-time high of 892,803 on Monday.

The market sentiment still has a long way to go to move completely out of the fear territory. However, if bitcoin is able to make its mark and break through $25,000, sentiment is expected to turn bullish very quickly.

Featured image from Coindesk, chart from TradingView.com

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