Traders who have held Bitcoin for more than 155 days are selling their stash as the price is $ 20,000, a Glassnode study found.
ASOL (Please do not read out loud)
The on-chain analysis platform quoted AOL (Average Spent Output Lifespan), a barometer for measuring the average age of the coins used. The higher values of the metric reflect that long-term owners make their profits by selling their Bitcoin.
Bitcoin ASOL hit a local peak on November 2020. Source: Glassnode
The table above shows entry-adjusted ASOL. The metric rose prior to November 18, a period that coincided with the rally in Bitcoin price from $ 9,800 to $ 18,800. It showed that more and more long-term traders were selling the cryptocurrency at their local tops.
Glassnode provided free evidence of a dump by measuring the total return on Bitcoin supply from long-term holders or LTH. The metric peaked at 12.3 million BTC on November 17, when Bitcoin was trading around $ 17,670. After that, the price of the cryptocurrency continued to trend higher, but LTH fell nearly 200,000 BTC.
“This,” said Glassnode analyst Liesl Eichholz, “supports ASOL’s suggestion that a significant amount of BTC owned by long-term owners was actually sold in late November, although price offer has increased since then, LTH profit offer has decreased.” ”
If long-term holders exit the Bitcoin marker with their profits, it could be interpreted as a sign of the underlying weakness of the market. Even so, Glassnode made it clear that profit-taking behavior was actually bullish.
“The sharp decline in the entire LTH supply shown above makes intuitive sense. As these long-term owners are making profits, they are giving new private investors room to enter the market that has historically driven the largest bull markets for Bitcoin, ”said Ms. Eichholz.
The statements reflected a spate of recent Bitcoin comebacks after major downward revisions. Just recently, the cryptocurrency hit an all-time high near $ 20,000. But the new peak attracted sellers, dropping the price to $ 18,100 (data from Coinbase).
Bitcoin price is looking to close above $20,000. Source: BTCUSD on TradingView.com
Bitcoin later rebounded to above $ 19,500, showing that the bulls were in control of the entire market trend.
“If the price of BTC follows this historical trend,” added Eichholz, “it suggests that we expect further price increases before the top is reached.”