The crypto world remains exciting: While the Bitcoin market has recently experienced turbulent times, long-term holders (LTH) are unimpressed. Although the Bitcoin price fell sharply at the beginning of the week, HODLers are standing firm and taking the opportunity to maximize their profits.
STHs capitulate, LTHs profit
Crypto investors are divided into two main groups: the Short-Term Holders (STHs) and the Long-Term Holders (LTHs). STHs are investors who hold their cryptocurrencies for less than 155 days. They tend to react faster to market fluctuations and therefore represent the more volatile side of the crypto market. LTHs, on the other hand, hold their crypto beyond this period. The longer they hold their holdings, the less likely they are to sell. These HODLers typically maintain their holdings despite short-term price fluctuations.
During the recent BTC crash, both STHs and LTHs showed significant reactions. According to an analysis by CryptoQuant expert Julio Moreno, many short-term investors sold their holdings in a panic, which led to significant losses: The STHs’ Spent Output Profit Ratio (SOPR) indicator fell below the 0.8 mark, which corresponds to a loss of more than 20 percent. The SOPR indicates whether investors are selling their BTC at a profit or a loss. A value below 1 indicates a loss. In contrast, the HODLers’ SOPR remained stable above 1 – they made profits despite the turbulence.
The difference between #Bitcoin short and long-term holders:
– Short-term holders capitulated, some selling at a 20% loss.
– Long-term holders still spending at a profit. pic.twitter.com/7qzHAQA1Od— Julio Moreno (@jjcmoreno) August 5, 2024
HODLers are increasing their holdings
Despite the market uncertainties, Bitcoin HODLers have increased their holdings by over 404,000 BTC in the last month, with a total value of more than 23 billion USD. The HODLers are confident in BTC long-term potential and are taking advantage of the price drop to increase their positions – in anticipation of a market recovery.
CryptoQuant CEO Ki Young Ju also expects that the BTC price could continue to rise. In a tweet, he stated that the BTCprice could reach a new all-time high next year provided it stays above 45,000 USD in the long term. He expects a recovery within the next two weeks, but warns that the chances of a market recovery decrease if prices remain this low for more than a month.
As long as the #Bitcoin price stays above $45K, it could break its all-time high again within a year, imo.
Some indicators are showing bearish signals. However, they could still recover with a rebound, so we need to watch if it stays at this level for a week or two.
If it… https://t.co/FnqafcQcjp pic.twitter.com/fJiM2btQeF
— Ki Young Ju (@ki_young_ju) August 6, 2024
Currently, the BTC price has recovered to around 57,000 USD (as of August 7, 2024), supported by an easing of recession fears in the US. Ethereum has also benefited from the recovery and is trading above 2,500 USD. The improved investor sentiment points to a possible new growth phase for Bitcoin and cryptocurrencies in general.
- CryptoQuant Analyst: Bitcoin Nowhere Near Its Peak – Buckle Up, Hodlers! - December 21, 2024
- Chainalysis: $2.2 Billion Lost to Crypto Hacks in 2024 - December 21, 2024
- Bank of Japan leaves interest rate unchanged: Impact on the macroeconomy and the crypto market - December 20, 2024
