Bitcoin [BTC] Long-term holders may have started to lose their belief in the cryptocurrency due to the constant price drop. Additionally, these holders turned to selling BTC at a loss.
Glassnode noted in its latest report that the 90-day Coin Days Destroyed (CDD-90) metric was at an all-time low. This meant older BTC were dormant as HODLers continued to hold amid bearish market conditions.
Source: Glassnode3
HODL no more
According to CryptoQuant analyst EdrisLooking at the Exchange Inflow – Spent Output Age Bands metric showed that coins previously held for 6-18 months have recently been allocated “aggressively”.
Most of these coins were bought during the 2021 bull market and above the $30,000 price mark, according to Edris. However, amid rising uncertainty and doubts about a significant near-term spike in BTC price, some long-term holders have “exited the market at around 50% losses.”
All of this, however, had a silver lining. Edris believed that these types of sell-offs usually indicate a bear market cycle is nearing its end. According to Edris,
“In the late stages of bear markets, even the more loyal investors tend to capitulate out of fear and sell their coins at huge losses to avoid bigger ones. These types of capitulations typically occur in the final months of a bear market, suggesting a possible bottoming in the near future.”
Source: CryptoQuant
What happened if…
While Edris suggested that the current bear cycle may be nearing its end, BTC’s on-chain performance has shown stagnation over the past two quarters.
According to data from Santiment, the Median Invested Dollar Age (MDIA) and Median Coin Age have been in an uptrend for the past six months.
This caused several BTC investments to go dormant for a time. In addition, such stagnation in the network usually makes it difficult for an asset’s price to recover. Therefore, for a significant price increase for BTC to be possible, these dormant coins must experience some activity.
Source: Santiment
That being said, BTC was trading below the psychological $20,000 region at press time.
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