⚠️Short-Term Holders are distributing BTC while Long-Term Holders are accumulating again. This is a bad sign for Bitcoin, and such behavior has historically marked the beginning of a Bear Market for the cryptocurrency market.
When the price of Bitcoin rises, Long-Term Holders tend to sell their positions while Short-Term Holders accumulate more BTC. With the influx of institutional and retail money, this phase is considered a Bull Market. However, when Short-Term Holders stop accumulating BTC, it signals the end of the price increase cycle, directly influencing the supply vs. demand dynamics.
To improve interpretation, we can analyze the 1-year moving average of the Accumulation vs. Distribution indicator for Short-Term Holders, making this behavior more apparent. Throughout Bitcoin's history, when this metric stopped rising and started to reverse, the price of Bitcoin entered a Bear Market phase. However, it is important to note that on some occasions, a "Fake Bear Market" occurred where the price continued to rise afterward. For a more anticipatory view, we can also analyze the 90-day moving average, which is currently in the red, indicating more selling over the past three months.
🧠We cannot definitively say that the current decline in the metric is a bad sign for the price, but we emphasize the importance of constantly analyzing the sentiment of Short-Term Holders along with other metrics for more accurate decision-making.
