Bitcoin News: BTC Holders Cash In
The crypto world continues to be exciting: Despite recent turbulence in the Bitcoin market, long-term holders (LTH) remain unfazed. Even though Bitcoin's price dropped significantly at the start of the week, these HODLers stand firm and seize the opportunity to maximize their profits.
Short-Term vs. Long-Term Holders
Crypto investors fall into two main groups: short-term holders (STH) and long-term holders (LTH). STHs are investors who hold their cryptocurrencies for less than 155 days. They tend to react quickly to market fluctuations, representing the more volatile side of the crypto market. LTHs, on the other hand, hold their cryptos for more than 155 days. The longer they hold, the less likely they are to sell. These HODLers usually keep their holdings despite short-term price swings.
Market Reactions
During the recent Bitcoin crash, both STHs and LTHs showed clear reactions. According to CryptoQuant expert Julio Moreno, many short-term investors sold their holdings in panic, leading to significant losses. The Spent Output Profit Ratio (SOPR) for STHs fell below 0.8, indicating a loss of more than 20%. The SOPR shows whether investors are selling their Bitcoins at a profit or loss, with a value below 1 indicating a loss. In contrast, the SOPR for HODLers remained stable above 1, meaning they were still making profits despite the market turmoil.
HODLers Increase Holdings
Despite market uncertainties, Bitcoin HODLers have increased their holdings by over 404,000 BTC, worth more than $23 billion, in the last month. These HODLers believe in Bitcoin's long-term potential and use price drops to build their positions, anticipating a market recovery.
CryptoQuant CEO Ki Young Ju also expects Bitcoin's price to rise. In a tweet, he predicted that Bitcoin could reach a new all-time high next year if it stays above $45,000 for the long term. He expects a recovery within the next two weeks but warns that chances of a market rebound decrease if prices stay low for more than a month.
Currently, Bitcoin's price has recovered to around $57,000 (as of August 7, 2024), supported by easing recession fears in the US. Ethereum has also benefited from the recovery, trading above $2,500. The improved investor sentiment points to a potential new growth phase for Bitcoin and cryptocurrencies in general.
