How short-term Bitcoin holders invest differently than long-term holders according to on-chain data
Looking at chain data shows clear differences in how short-term and long-term holders invest in Bitcoin. Short-term owners have mainly bought between $17k – $48K levels, while long-term owners are strong up to $60k.
We can analyze some key graphs to better understand the data. The UTXO Realized Price Distribution (URPD) shows the prices at which the current set of Bitcoin UTXOs were created. Each bar indicates the number of existing bitcoins that last moved within the specified price bucket. The price specified on the x-axis refers to the lower limit of that bucket.
After the 75% decline from the all-time high this year, 11.5% of supply is currently held around the $17k price level. The increase in inventories between $17k and $24k may indicate that a lot of demand has been swept up. Below $17.6k, all coins that have not moved must be defined as long-term owners, as Bitcoin has not fallen below this price since 2020. However, these investors can be considered mature long-term owners. The coins are lost or owners are unwilling to sell up to this point.
The following chart shows the type of cohorts that buy at these price levels. The unit-adjusted version of the URPD metric offers the supply segmented by long-term owners (blue), short-term owners (red) and exchange balances (grey). All supply appears in the price bucket that the respective entity (on average) has sourced its coins for.
In the case of short-term owners (holding BTC for less than 155 days), you can see the transfer of ownership from long-term to short-term owners around $20k, from long-term owners surrender sellers to HODLers or investors. They see value in these price ranges.
It has strong buying at psychological level from both short and long term holders at 20,30 and 40k. There is a lot of long-term holder supply currently under water. It will be interesting to see if short-term owners convert to long-term owners around the 40-50k range.
Shrimp cohorts with less than 1 Bitcoin have stacked Sats relentlessly through the price ranges. Reker seems unfazed by price action and has bought a significant amount of Bitcoin at current lower price levels compared to similar historical price ranges. The black vertical line shows the market price at the map production timestamp.
Interestingly, most barter coins were bought between $30k and $49k with very little, if any, above $40k. This information is essential to assess the liquidity of an exchange that has Bitcoin on its balance sheet. At today’s level of $23,800, the exchanges are under water by about 65% on the coins they have not sold.
There has been less buying of exchanges under $30k. However, around 350K BTC were bought at the psychological level of $20k, totaling around $7 billion at the time of the sale. Addresses with less than 10k Bitcoins primarily defended the level.
The following tweet by Prof. Chaine shows an animated version of the UDRP chart over time.
On peut aisément voir cette dynamique prendre forme et l’offre changer de propriété dès que le prix a invalidé le niveau des 20k $
Depuis, près de 2.6 million de BTC, soit 13.9% de l’offre en circulation on été échangés entre 17.8k $ et 22.5k $ pic.twitter.com/zIDsJWhCpz
— Prof. Chaîne (@profchaine) 28 July 2022
