On-chain metrics show that Bitcoin is seeing a significant shift in investor dynamics as the supply shift favors long-term holders.
According to the 75th edition of Bitfinex alpha reportthe supply of long-term Bitcoin holders has increased by more than 1 million Bitcoin (BTC) since April 13, 2023, while the supply of short-term Bitcoin holders has decreased by nearly 1 million Bitcoin (BTC) over the same period.
Bitcoin is seeing a shift in investor dynamics
Bitfinex analysts defined short-term holders (STHs) as investors who have held Bitcoin for less than 155 days, while long-term holders (LTHs) have held the asset for 155 days or more. While STHs reduced their holdings from April 13 until now, LTHs increased their holdings.
On one occasion, between September 25 and 26, there was a significant drop of 200,000 BTC by STHs. During the same period, LTHs saw an increase of 200,000 BTC. Bitfinex analysts believe that this is the typical behavior of investor groups, as STH usually sells to take advantage of profits or mitigate losses, while LTH increases its holdings due to its belief in BTC’s long-term potential.
Due to the shift in dynamics, LTH supply is now at all-time highs, while STH supply has fallen to levels seen almost eight years ago. Bitfinex said the gap worsened in the past few weeks as many STHs liquidated their spot positions and made small profits as bitcoin rose to $28,500 at the beginning of the month.
Bitcoin volatility will remain high for October
Last week, Bitfinex said several market indicators showed that several investor groups were in the HODL phase, preparing for a potential rally. This time, the cryptocurrency exchange believes that Bitcoin will see high levels of volatility in October because the cryptocurrency asset started the month with a “big bang,” with its 24-hour volatility increasing by more than 340% on October 2.
“As volatility spreads from the US stock market to Bitcoin and other crypto assets, we currently see isolated high volatility events continuing to rise, and with historical volatility remaining above critical averages, this trend is likely to continue. Additionally, the options market is currently pricing more It is as volatile for Bitcoin as it has been in the past,” Bitfinex analysts said.
Meanwhile, Bitcoin appears to have decoupled from the major US indices. This is evidenced by the asset price reaching the bottom of its current range sometime before the S&P 500, which has just rebounded from the 4,200 level.
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