A recent report from Bitfinex Alpha reveals a shift in Bitcoin ownership dynamics, with short-term investors taking the spotlight in the crypto market.
Short-term Bitcoin investors, defined as those who hold Bitcoin for less than 155 days, have significantly ramped up their activity. Their collective holdings have soared from 2.2 million BTC in January to over 3.4 million BTC by mid-April, marking a substantial 55% increase.
This surge can be attributed to the growing influence of spot Bitcoin ETFs, which have gained popularity among short-term holders. The concentration of these quick asset acquisitions around the current market price indicates a flurry of investment activity at this specific price level. However, it also exposes these holders to vulnerabilities and potential price fluctuations that may pose risks or lead to price drops.
The number of short-term holders continues to climb as new entrants join the market and acquire Bitcoin, while the price remains relatively stable due to the distribution of older coins. The market is in a phase of readjustment, with the $60,000-70,000 range emerging as the new support level for BTC, akin to how $10,000 served as a foundation in 2020.
Currently, short-term holders collectively possess approximately 3.3 million BTC, slightly lower than the peak in mid-April. This decline can be attributed to the market correction in March following Bitcoin’s record high.
In contrast, long-term Bitcoin holders are displaying strong confidence in the market. After Bitcoin hit a new all-time high of $73,666 in March, many long-term holders decided to sell off significant portions of their BTC holdings.
Recent data indicates a shift in this trend, with long-term holders now accumulating Bitcoin instead of selling. The amount of Bitcoin held by investors for over a year has remained relatively stable, suggesting that these investments are being held for the long term rather than being actively traded.
Additionally, only about 0.03% of the supply held by long-term investors consists of coins purchased at prices higher than the current spot price. During the early stages of a bull market, it is common to see long-term investors holding onto their profitable positions.
Bitcoin whales are also amassing Bitcoin at a rate reminiscent of the pre-2020 bull run, resulting in a new historical high in their Bitcoin balance.