18,000 Bitcoin bought by diamond hands
Bitcoin has been moving sideways for the past week after experiencing rejection in the $25,000 region. The cryptocurrency has reacted to macroeconomic uncertainty pushing the price to the downside, but BTC continues to flash long-term buy signals.
At the time of writing, BTC is trading at $23,500 with 1% profit in the last 24 hours. Over the past week, Bitcoin recorded a loss of 5%. Other cryptocurrencies in the crypto top 10 by market cap are recording similar price action, with Cardano (ADA) and Polygon (MATIC) leading the losers with 10% and 16% losses respectively.
Long-term Bitcoin holders show relentless accumulation
According to a report from Bitfinex Alpha, the recent downside price action in Bitcoin has led to an increase in accumulation by long-term holders. These investors took advantage of the decline in the BTC price to accumulate huge amounts of the cryptocurrency.
The report claims that long-term Bitcoin holders bought over 18,000 BTC in the past week. Bitfinex Alpha claims that these market dynamics suggest that the crypto market is showing characteristics of the end of its bear cycle.
Whenever long-term BTC holders enter the picture and accumulate, the price of Bitcoin trends upwards. The chart below shows that the 2021 bull run was preceded by an increase in the long-term holder supply, the amount of Bitcoin in the hands of multi-year investors.
Unlike speculators, these investors hold the cryptocurrency for longer time frames, reducing the amount of BTC available for sale. Thus, Bitcoin moves in step with this calculation. The report claims:
The supply of long-term holders has continued to push higher. Long-term hodlers who make up a significant portion of the BTC supply are a crucial feature of the chain at the bottom of the bear market, and are a positive signal that is taking place amid a 40 percent price increase since the beginning of this year.
In addition to the increase in long-term BTC holders, the report noted whale wallet inflows since last Friday, the 25th. February. These indications suggest the confidence of major investors in the BTC price. The report concluded:
Historically, whales have continued to accumulate through even 100 percent moves (for example, when the price rose from $3k-6k in 2019) during the end of the bear market; such was the case during the bear market rally of 2019 and the flash crash of 2020 when the pandemic caused risk assets to crash.
