Bitcoin’s volatility in the past week created the perfect market conditions for analyzing the behavior difference between long-term and short-term holders. Previous CryptoSlate reports highlighted the importance of these two cohorts and how their actions influence the market.
Between June 28 and July 3, Bitcoin’s price fluctuated between $60,000 and $62,000. It failed to find support on July 4, dropping below $60,000 in late US hours. While this timeframe and volatility might not seem significant, they provide a perfect backdrop to understand how each portion of the market moved.
With Bitcoin’s price struggling to leave $60,000 on June 28, short-term holders spent 186,945 BTC in loss. This sharply contrasts with long-term holders, which showed a minimal loss volume of just above 61 BTC. As Bitcoin regained some strength at $62,000, STHs showed a notable drop in spent volume in loss to 34,642.
The brief period of reduced losses showed a short moment of confidence, with STHs most likely anticipating further growth. However, by July 3, the spent volume in loss for STHs climbed to 119,623 BTC, showing a resurgence of selling pressure.
During this period, STHs accounted for over 99% of the spent volume in loss. In contrast, the percentage of spent volume in loss from LTHs ranged from 0.033% to 0.589%. Such a low percentage shows how unlikely long-term holders are to sell their BTC at a loss compared to short-term holders.
Graph showing the total volume spent in loss for long-term and short-term holders from June 21 to July 3, 2024 (Source: Glassnode)
Transfer volumes from STHs in loss to exchanges show how much of that spent volume ended up on exchanges. On June 28, a high of 18,861 BTC was transferred, showing panic and urgent liquidity needs among STHs.
This volume dropped significantly over the following days, reaching a low of 3,178 BTC on June 30, reflecting a temporary reduction in selling pressure in spent volume. The subsequent increase to 15,980 BTC on July 3 aligns with the observed increase in spent volumes in loss and declining prices, further confirming an increase in selling pressure.
Chart showing the total amount of coins transferred from short-term holders in loss to exchange wallets from June 28 to July 3, 2024 (Source: Glassnode)
The disparity between LTHs and STHs is also evident in the difference in realized profit. The realized profit percentages from long-term holders are significantly high, often exceeding 80% during this period and reaching up to 93.91% on July 3. On June 28, LTHs realized substantial profits of $348.708 million, contrasting with STHs’ modest $54.773 million.
Interestingly, on July 1, both groups realized significant profits, with STHs at $201.597 million and LTHs at $279.358 million, coinciding with a peak Bitcoin price of $62,833. This suggests that both cohorts seized the opportunity to lock in gains at this price peak.
Graph showing the realized profit for long-term holders (blue) and short-term holders (red) from June 28 to July 3, 2024 (Source: Glassnode)
This data paints a clear picture of the difference in behavior and strategies of these cohorts. Short-term holders show extremely reactive behaviors, quickly adjusting their positions and offloading significant volume based on immediate market changes.
Long-term holders, on the other hand, show a more strategic and calculated response. The disparity in their behavior shows a market in a state of flux, with price movements and volumes showing a combination of profit-taking and loss-mitigation strategies.
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