The proportion of long-term holdings increased

Citing Glassnode’s Hodl Wave chart, Cointelegraph notes that roughly three-quarters of Bitcoin in circulation have not moved in the past six months or more. This chart uses blockchain data to show how long Bitcoin has been held in wallets, categorized by when they were last moved.

This data has increased significantly over the past week. According to data from August 11, approximately only 45% of the Bitcoin supply has been at rest for at least six months. However, data now shows that roughly 74% of Bitcoin has remained unchanged for most of this year, despite a 21% price drop from its all-time high.

The trends in the proportion of these "unmoved Bitcoins" indicate that long-term investors are increasingly leaning toward Bitcoin as a store of value, possibly in anticipation of future price increases. On the other hand, this holding trend also results in a smaller supply of Bitcoin available for trading, which could drive prices higher as demand increases and supply decreases.

Short-term holders may sell

At the same time, on-chain analyst James Check also pointed out in an X tweet on August 19 that more than 80% of short-term holders of Bitcoin are at a loss because their holding costs are higher than the current spot price.

Right now, over 80% of#BitcoinShort-Term Holders are underwater, meaning their coin was acquired at a price above the current spot price.This is similar to 2018, 2019, and mid-2021 which signalled many investors were at risk of panicking, and precipitating a bearish trend. pic.twitter.com/8jM7PBqh5z

— _Checkmate (@_Checkmatey_) August 19, 2024

He warned that if these holders panic sell as they have in previous years, it could lead to further losses. Short-term holders are those who hold Bitcoin for less than 155 days.

"This is similar to what happened in 2018, 2019 and mid-2021, when many investors were at risk of panic, which triggered a bearish trend."

Currently, market sentiment remains pessimistic, with the Bitcoin Fear and Greed Index showing 28, in a state of fear. Over the past few weeks, the index has returned to levels of fear not seen since December 2022.

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