Bitcoin ‘Diamond Hands’ Drops 50% Sale at $73.8K – Study
Bitcoin (BTC) “Diamond hands” are not working as BTC price action hit a new high of $73,800.
In a new May 28 study, on-chain analytics firm Glassnode found that selling pressure from older coins is less than half the peak of the previous bull market.
Bitcoin investors stop taking profits
Bitcoin long-term holders (LTHs) continue to resist the desire to take profits – even with BTC price action near $70,000.
Despite averaging 3.5 times profit, LTH wallets are not selling BTC yet, making the current bull market sustainable.
“As prices respond to renewed buy-side pressure, the importance of the opposite side, sell-side pressure, from long-term holders will increase,” says Glassnode in the latest edition of its weekly newsletter, “The Week on Chain.”
“Therefore, we can assess LTH Group's incentive to sell unrealized profits and their actual profits to assess the actual sell side.”
LTHs refer to wallets that hold BTC for 155 days or more, and reflect what should be the less speculative end of the Bitcoin investor spectrum.
Using the market value-to-realized value (MVRV) measure, Glassnode recently showed that LTHs are entering historically high unrealized gains in bulk.
“Historically, the transition phase between bear and bull markets is when LTH trades above 1.5, but below 3.5, and can last for one to two years,” he continued.
“If the market's uptrend is sustained, it will create new ATHs in the process, widening the unsecured profits held by LTHs. This will increase their incentive to sell and eventually lead to a sell-side pressure level that will gradually deplete the demand side.”
LTH sales pressure “impressively contracted”
Given March's recent high, however, there is room for optimism if BTC's price recovery rebounds.
RELATED: Bitcoin Has ‘3 Bullish Reasons' To Rise After $68K Dip – Analysis
Even at the high of $73,800, LTHs did not trade as heavily as the previous bull market burst.
“During the last two bull markets, LTH's net circulation rate has ranged from 836k to 971k BTC per month,” the paper said.
“Currently, at the end of March, the network's sales pressure increased by 519k BTC/month, approximately 20% of which came from Grayscale ETF holders.”
Glassnode cited continued selling by investors in Grayscale Bitcoin Trust (GBTC) — an institutional investment vehicle that lost its top spot among Bitcoin ETFs in assets under management this week.
Going forward, the report sees LTHs continuing the rebounding investment trend from late last year.
“Sell-side pressure entered the contract after distribution to $73k ATH by top long-term owner investors,” he wrote in part in the summary.
“Long-term holders are starting to regroup coins for the first time since December 2023.”
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
