On-chain data shows that short-term Bitcoin holders panic-sold $2.6 billion worth of coins in the crash following the new all-time high.
Short-term Bitcoin holders have brought huge losses to exchanges
As analyst James V. Straten explained in a new post on X, short-term Bitcoin holders have shown signs of capitulation during the cryptocurrency's recent price drop.
The “Short-Term Holders” (STHs) refer to the BTC investors who have purchased their coins within the last 155 days. The STHs form one of the two main divisions of the market, the other being the Long-Term Holders (LTHs).
Statistically, the longer an investor holds on to them, the less likely they are to eventually sell their coins. This means that the STHs, which are relatively new hands, are generally sold quickly if there is a crash or recovery in the asset. The LTHs, on the other hand, usually show resilience and only sell at certain times.
One way to track whether any of these groups are selling is by the transfer volume they send to exchanges. First of all, here is a chart showing the trend of the Bitcoin exchange inflow volume exactly for the STHs in loss:
The value of the metric appears to have risen sharply in recent days | Source: @jvs_btc on X
As shown in the chart above, Bitcoin STHs have transferred around $2.6 billion worth of coins to exchanges in losses over the past day, suggesting that some members of this cohort have capitulated.
This increase is huge, but it is smaller than the loss event that occurred during the price decline following the approval of the BTC spot exchange-traded fund (ETF).
These losing sellers were those who reacted with FOMO to the rally that took BTC to a new all-time high beyond $69,000, but their conviction was not strong enough to withstand the sharp decline that BTC witnessed shortly , to survive after.
The STHs are not the only ones that have exited the market in this recent price volatility. it seems the LTHs have been selling something too. However, the difference is that these HODLers have made profits.
The chart below shows what the exchange volume of LTHs in profit has looked like recently.
It looks like the value of the metric has seen a sharp increase recently | Source: jvs_btc on X
The chart shows that Bitcoin LTHs participated in their biggest profit-taking since July 2021, transferring $1.5 billion worth of tokens to exchanges.
So it seems that this recent volatility has shaken the conviction of even some diamond traders, although at least these HODLers were still rewarded with profits.
BTC price
At the time of writing, Bitcoin is trading around $65,800, up 8% over the past week.
BTC has been on a rollercoaster ride in the last few days | Source: BTCUSD on TradingView
Featured image by YuMuHunZhucdd20 on Unsplash.com, Glassnode.com, Chart from TradingView.com
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