In recent months, the world of cryptocurrency has been buzzing with activity, with Bitcoin, the world’s most popular cryptocurrency, experiencing a wild ride. According to data by CryptoQuant, there has been a significant shift in the balance of Bitcoin holdings between short-term and long-term holders.

As per the data, long-term holders (those who have held Bitcoin for more than six months) currently hold 76.8% of all Bitcoins in circulation, while short-term holders (those who have held Bitcoin for one day to six months) hold 22.12%. This indicates that the majority of Bitcoins are held by investors who are looking to hold on to their investments for the long term.

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Interestingly, the most value is held in the 10-1k BTC band, which accounts for nearly 50% of all Bitcoins. This band represents a significant amount of wealth in the Bitcoin ecosystem, and its significance cannot be overstated.

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The data also reveals changes in short-term and long-term holders’ balances from the $15,000 level of Bitcoin on November 21 until now. Long-term holders have been increasing their balances in the 2-3 year and 5-7 year age bands, while short-term holders have been increasing their balances in the 1-3 month and 3-6 month age bands.

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However, it’s worth noting that short-term holders’ age bands have seen selling pressure in addition to accumulation. This suggests that these investors are more prone to panic selling during times of volatility.

To understand the holding behaviors per cohort, analysts have been using a valuable metric called realized price-UTXO age bands. These metrics help to examine long-term and short-term trends, allowing investors to better understand market movements.

Based on Bitcoin cycles, the 1-3 month and 6-12 month bands can be considered support and resistance levels. The 1-3 month band effectively prevented Bitcoin from falling further during its most recent correction in early March. Additionally, when Bitcoin hit the 6-12 month band during the last bullish leg, its upward momentum was limited, with this index now acting as a barrier at $28K.

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Overall, the data from CryptoQuant highlights the importance of understanding holding behaviors and market movements in the world of cryptocurrency. With Bitcoin experiencing such high levels of volatility, investors need to be vigilant and stay up to date with the latest metrics and trends.

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This article was republished from azcoinnews.com

Bitcoin has been making headlines once again, and for good reason. Cryptocurrency has been experiencing a significant surge in value, leading many to wonder if it is in the midst of a bull market. The latest data from CryptoQuant seems to suggest that this is indeed the case. However, it also highlights some concerns that investors should be aware of.

One of the most reliable indicators of a bull market is the On-chain P&L Index, which has been steadily increasing over the past few months. This is a clear sign that investors are buying more bitcoin than they are selling, which is driving up the price. Additionally, inter-exchange flows have also been on the rise, further confirming that bitcoin is in a bull market.

While these indicators are certainly encouraging, caution is still advised. The Bull/Bear Market Cycle indicator, for example, is now indicating an overheated bull territory, with the line turning red. This suggests that a price correction may be on the horizon.

To further illustrate this point, CryptoQuant has identified four on-chain metrics that offer insights into recent bitcoin activity. Firstly, short-term holders have been taking profits at a remarkable profit margin, the highest since November 2021. Secondly, there has been a significant spike in bitcoin inflows into exchanges as the price of bitcoin approached $28K, reaching the highest levels in 2023. This trend is further exacerbated by the fact that bitcoin miners have been contributing to these inflows. Finally, a considerable proportion of bitcoin flowing into exchanges has been from large holders, indicating that whales have been dominating exchange inflows recently.

Bitcoin’s Rally Not Driven by Derivatives or Leverage: Neutral Funding Rates and Low OI Build-Up

However, according to data by Glassnode, it seems that the recent Bitcoin rally is not being driven by derivatives, but rather by spot accumulation on Coinbase. This is certainly a positive sign, as it suggests that the rally is not artificially inflated by leverage.

It is worth noting that the Estimated Leverage Ratio is still below the average of the past three years, and there has been no significant build-up of open interest in futures contracts.

Additionally, the OI is less than 400,000 Bitcoin. While this does not necessarily mean that a price correction is imminent, it does suggest that investors should be cautious and keep a close eye on the market.

In conclusion, the latest data from CryptoQuant suggests that bitcoin is in a bull market. However, investors should exercise caution, as there are indications that a price correction may be on the horizon. By paying close attention to on-chain metrics and other relevant data, investors can make informed decisions about their investments in bitcoin.

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This article was republished from azcoinnews.com