Long-term holders (LTH):.
- Long-term holders are individuals or entities that hold onto their
Bitcoin for an extended period, typically over a year.
- Long-term holders usually adopt a buy-and-hold investment strategy,
believing in the long-term potential of Bitcoin.
Short-term holders (STH):.
- Short-term holders are those who buy and sell Bitcoin within a shorter
timeframe, typically less than a year. This group often includes traders
who engage in frequent transactions to take advantage of short-term
price movements.
- Short-term holders often employ trading strategies like day trading,
swing trading, or scalping to capitalize on market volatility.
STH and LTH Behavior:.
STH Realized Cap Changes (orange area):,
- Increases above 6B typically correlate with short-term holders
realizing small gains during price rises or buying at the market top.
- Decreases below -6B indicate short-term holders realizing losses or
selling during price declines (panic selling).
LTH Realized Cap Changes (blue area):.
- Increases above 6B typically correlate with long-term holders realizing
small losses during price declines or buying during price dips.
- Decreases below -6B indicate long-term holders realizing gains or
selling during market tops (taking profits).
Green Rectangles:.
- Often correspond with periods where the price dips and LTHs are
accumulating, taking advantage of lower prices to increase their
holdings.
Red Rectangles:.
- Correlate with significant price movements where STHs either take
profits during spikes or panic sell during drops.
Conclusion:
The chart provides a clear visualization of how different types of Bitcoin holders react to price changes. Long-term holders (LTHs) tend to accumulate during price declines, indicated by the blue areas and supported by the green arrows and rectangles. Short-term holders (STHs) selling at losses during declines, as shown by the orange areas and red rectangles.
Written by Amr Taha