- There has been an increase in the volume of foreign exchange inflows from long-term BTC holders.
- This suggests that these investors are now taking profits.
Leading coin Bitcoin [BTC] There may be a short-term price correction as on-chain data suggests coins are moving from long-term holders (LTHs) to short-term holders (STHs).
In a new one reportCryptoQuant analyst Yosei Dent assessed the coin's exchange activity and noted that there was an increase in the amount of long-held BTC transferred to exchanges when it crossed the $51,000 price mark on February 14.
LTHs pause to take profits
According to Dent:
“As soon as BTC broke $51,000 on the 14th, 5,153 BTC aged 6 to 12 million flowed into exchanges.”
Dent added that BTC holders in this cohort of investors acquired their coins during the 2023 bull run that began in October and resulted in the coin's value ending the trading year at a multi-month high of $42,000.
Additionally, on the same day, the foreign exchange inflow volume from coin holders who have owned their BTCs for three to five years briefly climbed to 2,123 BTC.
Source: CryptoQuant
According to Dent, most of these investors purchased their coins during the bull market from 2019 to 2021. Therefore, the recent increase in the volume of foreign exchange inflows from them indicated that they were taking profits.
“Considering that the BTC price was at $48,000 on February 14, 2021, it appears that a portion of the 3-5 year cohort investors may have exited the market at their break-even point,” Dent said.
If BTC sees an increase in foreign exchange inflows from these investor groups, it would suggest that coins are moving from the hands of LTHs to STHs.
The movement is often accompanied by a decrease in price. This is because STHs are often “weak hands,” ready to sell their coins at any sign of negative sentiment.
However, Dent noted:
“However, this size is relatively small compared to LTH exchange inflows in previous cycles.”
Many BTC holders are “afloat”
At press time, BTC was trading at $51,245 CoinMarketCap. In the last month alone, its value has increased by almost 30%.
Read Bitcoins [BTC] Price prediction 2024-2025
Of all addresses holding BTC, 92.23% are considered “in-the-money”. This means they are currently holding the leading asset at a profit.
On the other hand, there are 5% made up of 2 million addresses that are currently holding their BTCs at a loss. These holders acquired their coins when BTC was trading between $52,000 and $67,000.
Source: IntoTheBlock
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