Tuesday, July 16, 2024

Data Reveals Short-Term Bitcoin Holders Refuse To Sell Despite SEC Crackdown

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Amid ongoing regulatory scrutiny and fear, uncertainty, and doubt (FUD) surrounding Bitcoin (BTC), short-term holders who are often known to be the first to sell off their assets when prices decline have displayed unusual resilience in the face of the current market challenges. 

According to the latest data, these holders are bucking the trend and choosing to stay in the market, indicating their confidence in Bitcoin’s future profitability.

Short-Term Holders Display Resilience Amid Regulatory Challenges

According to an analysis from CryptoQuant, Bitcoin’s lackluster price performance within the $25,000-$30,000 range has not dampened the enthusiasm of short-term holders. The Short-Term Holder Spent Output Profit Ratio (SOPR) metric reveals their interest in remaining in the market and seeking profitability.

The persistence of this metric over consecutive months, coupled with short-term holders’ pocket value surpassing a specific threshold, indicates their commitment to staying invested. CryptoQuant further reveals this pattern mirrors previous price cycles, such as those witnessed in 2015 and 2019, where short-term holders maintained their positions and reaped long-term rewards.

Notably, the current cycle’s profitability for both long-term and short-term holders has not yet reached levels that trigger significant selling pressure. This trend suggests that Bitcoin still has room for growth and the potential for another wave of demand.

Despite ongoing regulatory challenges and negative market sentiment, short-term holders remain undeterred, holding on to their Bitcoin investments with optimism. Moreover, Glassnode data has further supported the resilience of short-term holders, revealing a recent uptick in hodling activity.

According to the data, after a period of active selling in the previous month, short-term holders have shown a renewed commitment to retaining their Bitcoin holdings. This shift in sentiment indicates their belief in the future potential of Bitcoin, even in the face of regulatory uncertainties.

Long-Term Holders Maintain Confidence In Bitcoin

Meanwhile, long-term Bitcoin holders have also demonstrated confidence in the cryptocurrency, in addition to short-term holders being unfazed. These holders have shown minimal movement of their tokens to centralized exchanges, highlighting their commitment to holding their Bitcoin assets for the long term.

By maintaining their positions and avoiding panic selling, long-term holders contribute to the overall stability of the market and reinforce the positive outlook for Bitcoin. Regardless, over the past week, Bitcoin has faced a significant price plunge, causing its market value to dip below $26,000, marking a decrease of 2.9%.

This downward trend can be attributed to the prevailing negative sentiment in the crypto market, which has been further intensified by the recent Securities and Exchange Commission (SEC) lawsuit against Binance and Coinbase, two of the world’s leading cryptocurrency exchanges.

However, despite this decline, the largest cryptocurrency by market capitalization has shown a slight uptick of 0.2% in the last 24 hours.

In contrast, BTC is trading at $25,826, reflecting a notable drop in value compared to its price of above $27,000 just a week ago.

Bitcoin (BTC)’s price chart on TradingView
Bitcoin (BTC)’s price moving sideways on the 4-hour chart. Source: BTC/USD on TradingView.com

Featured image from Unsplash, Chart from TradingView

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