Bitcoin holders cash in as price reaches new highs

The recent surge in Bitcoin price has triggered a wave of exchange inflows from long-term holders who are looking to take profits or cut losses, according to data from CryptoQuant.

On February 14, 2024, Bitcoin broke the $51,000 mark for the first time in 2024, reaching a high of $51,487. This was followed by an influx of 5,153 BTC from holders who had bought their coins between six and 12 months ago, as shown by the orange band in the chart below.

These holders had accumulated Bitcoin during the recovery period of 2023, when the price ranged from $20,000 to $32,000, and were likely to sell at a profit.

Source: CryptoQuant

Another notable spike in exchange inflow came from the holders who had bought their coins between three and five years ago, as indicated by the black band in the chart. These holders had acquired their assets during the bull run from 2019 to 2021, and some of them may have exited the market at their break-even point, considering that the Bitcoin price was at $48,000 on February 14, 2021.

The exchange inflow of long-term holders (LTH) can be seen as a sign of the transition from LTH to short-term holders (STH), who are more likely to sell or trade their coins in response to market fluctuations. This transition often leads to short-term price corrections, as the supply of Bitcoin increases and the demand decreases.

However, compared to the LTH exchange inflow in previous cycles, this scale is relatively small, suggesting that most LTH are still confident in the long-term value of Bitcoin and are holding on to their coins. The LTH supply ratio, which measures the percentage of Bitcoin supply held by LTH, is still above 80%, indicating a strong conviction among LTH.

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