Analysts reveal what the rise of short-term Bitcoin investors means for the cryptocurrency
The Bitcoin price should either rise over the next few months or go into accumulation mode, which means long movements within a single horizontal value channel. That’s the view of analysts at Glassnode, who have carefully studied what’s happening in the digital asset niche and shared their findings. In their view, a growing number of indicators suggest that investors should not fear a potential new collapse of BTC. They believe that the “capitulation” in the crypto market is almost over. Let us tell you more about the situation.
As a reminder, capitulation is the final major wave of cryptocurrency selling before the trend reverses. During this period, sellers' pressure on the market finally drops, resulting in the initiative going to those who want to buy the coin more actively. Glassnode believes that a clear sign of capitulation could be the activity of short-term BTC holders over the past few months.
That said, we note that the number of old coins without movement in the Bitcoin network is also high. Specifically, the number of BTCs that were last active for 5 to 7 years reached a 21-month high today. According to analysts, the figure stands at 922,235 coins, which means that some of this cryptocurrency could be lost as well.
Number of bitcoins that were active from 5 to 7 years ago
Be that as it may, experts are now focusing specifically on short-term investors who got involved with the coins relatively recently.
What will happen to the price of Bitcoin in the future?
Short-term holders, that is, those who hold BTC in their cryptocurrency wallet for less than 155 days, have significantly expanded their cryptocurrency reserves the day before. More specifically, their savings have increased by 330 thousand BTC since the collapse of the Terra project ecosystem in May this year. During the market crash from May to June, it was short-term holders who were most active in buying bitcoins “cheaper”, so this category of market players is now “in a better position”, according to Glassnode.
Changes in BTC short-term holdings
According to Cointelegraph’s sources, the sale of around 200,000 BTC by long-term holders of the cryptocurrency and the net outflow of coins on exchanges since May appear to have been the main direct signs of a redistribution of bitcoin supply available. Overall, all indications are that a capitulation has taken place, with the consequence that short-term holders “now own coins with a much lower average value”.
Bitcoin exchange rate
Most interestingly, short-term holders are generally considered “inexperienced” investors, who are more likely to buy BTC around the highs of the coin’s price. However, the statistics of the last few months show that this observation can not always be considered to be completely true. In other words, it is from the aforementioned short-term holders that a new group of “market sharks” may form in the coming years, they just don’t have as much money to accumulate Bitcoin right now.
Read also: Analysts have revealed the condition under which Etherium could surpass Bitcoin in terms of market capitalisation.
On the fundamentals side, there’s positive news too: major Brazilian broker XP Inc has officially launched a cryptocurrency trading platform called XTAGE. According to preliminary estimates, the initiative could quickly attract over 3.6 million Brazilians to trade digital assets. For now, only BTC and ETH are available to trade, but the broker’s representatives have previously noted that support for other crypto-assets may still emerge in the foreseeable future.
The XTAGE platform was developed in partnership with Nasdaq, the largest American stock exchange, and BitGo, a custodial company. It is fully integrated into the XP ecosystem, meaning traders can transact in crypto through the broker’s existing app. However, not everyone will get access to the trading itself – XP’s director of financial products Lucas Rabecini previously said that clients must have an “adequate investment profile” to work with XTAGE.
XTAGE platform on the Nasdaq exchange
It is likely to be about individual risk compliance requirements. The cryptocurrency market is a trading environment with huge volatility, which means digital assets without a proper approach to investing in them can bring losses to a broker’s clients. Overall, this is the right approach – especially if XP Inc will support the creation of educational content about crypto within the aforementioned requirements.
XTAGE is also integrated with the MetaTrade 5 terminal. BitGO acts as the custodian here, and it is with BitGo’s support that most of XTAGE’s cold wallet assets are stored precisely with no internet connection for added security.
We think the rise in the number of short-term cryptocurrency investors is indeed a positive sign. The fact is that long-term investors, who have no doubts about the prospects of coins and are willing to keep them for years, usually have the money to buy up digital assets after a major collapse. Well, less experienced traders are more likely to take positions at less favorable prices and much later. Therefore, in theory, what is happening could indeed be evidence of a market reversal - or at least its preparation for such behaviour.
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