Long-term owners of Bitcoin are still holding strong despite the price decline
On-chain data shows that Bitcoin long-term holders have continued to hold strong recently despite the asset’s price taking a hit.
Bitcoin long-term owners continue to show no significant movement
As pointed out by an analyst in a CryptoQuant post, short-term owners have continued to apply selling pressure of late. The relevant indicator here is “Spent Output Age Bands” (SOAB), which tell us which investor groups have sold or moved how many coins.
The “age bands” here refer to groups divided into based on how dormant a coin group has been. For example, the 1m-3m cohort includes all investors who have held their coins for at least one month and at most three months ago in a single wallet address.
If the BTC SOAB calculation is applied to this specific group, it will track the transactions on the blockchain made by the holders belonging to this age band.
Now, here is a chart showing the trend in Bitcoin SOAB for all the different age groups in the market over the last couple of months:
The recent movements of the different cohorts in the BTC market | Source: CryptoQuant
As shown in the graph above, Bitcoin SOAB has had some consistently high values for the 0-day to 1-day age bands recently. The other younger groups have also shown some noticeable values, but the older bands have not really observed any significant peaks.
The BTC market is usually divided into two main cohorts: short-term holders (STHs) and long-term holders (LTHs). The STHs include all investors who have held their coins since less than 155 days ago, while the LTHs include holders who have kept their coins dormant for longer than this amount.
This means that the younger age groups only correspond to different segments of the STHs. Since these groups have shown high values recently, it seems that the STHs have been actively selling the cryptocurrency during the rally.
Statistically, the longer an investor holds their coins, the less likely they are to sell at any time. For this reason, movements of the older coins can be of greater importance as they provide a window into how some of the most determined investors in the market have done it.
So far, these LTHs haven’t shown any significant movement since the rally started, despite the price seeing a bit of a dip in recent days.
A notable example of an LTH band that has recently peaked has been the 6-month to 12-month group, which saw an increase due to the US government moving around seized Bitcoin.
Naturally, this case was more of an exception and not indicative of a more general trend. The LTHs not showing any big transfers could be a positive sign for the price in the long term as it shows that these diamond hands still haven’t lost their belief in the cryptocurrency.
BTC price
At the time of writing, Bitcoin is trading around $20,000, down 10% in the last week.
BTC has plunged over the past day or so | Source: BTCUSD on TradingView
Featured Image by Kanchanara at Unsplash.com, Charts by TradingView.com, CryptoQuant.com
