Most Bitcoin investments are held for more than 6 months

Even far from its peak price, there is a trend for Bitcoins to remain in wallets longer than other tokens. Years after emerging as the largest cryptocurrency in the market, BTC continues to fuel investors’ hopes. This is because some are reluctant to sell when the cryptocurrency is priced low or regret missing the opportunity to buy BTC when the asset was still at the beginning of its growth.

However, experts were surprised to discover that the assets are being held for more than six months, despite a market showing signs of contraction. Continue reading to learn more about Bitcoin holding in wallets and its recent price movements.

Bitcoin wallets holding data

Recently, some charts produced by Glassnode, an on-chain intelligence company in the market, were released. The numbers regarding Bitcoin accumulation in wallets appeared in a chart called “hodl wave,” which shows the accumulation waves of the assets over a specific period.

According to the latest chart, three-quarters of all BTC in circulation have not left wallets in the last six months. Even in a highly atypical year for the token, with intense movements, most investors chose not to sell their tokens. Thus, the Glassnode chart indicates that 74% of BTC tokens simply remained parked.

For some experts, this trend indicates that investors are “holding” their tokens in the hope of increases. This suggests an intention to reserve the token’s value in anticipation of future price hikes.

This movement was more intense in 2024 due to some factors. The first was the approval of BTC ETFs in January. The asset quickly gained popularity, attracting more investors and attention to the market. As a result, many investors chose to keep the token in their wallets, hoping that the ETFs would cause BTC to increase rapidly.

The second factor was the BTC halving that occurred in April, which brought high expectations. On that occasion, the supply of new tokens for mining was cut in half, increasing the asset’s scarcity. However, the post-halving price increase did not exactly meet the expectations of experts.

Some investors holding tokens may be at a loss

Holding tokens in wallets can represent some kind of loss for investors if the strategy is not well planned. According to a post by analyst James Check on the social network X, at least 80% of these investors who are holding the tokens are at a loss.

Right now, over 80% of #Bitcoin Short-Term Holders are underwater, meaning their coin was acquired at a price above the current spot price.

This is similar to 2018, 2019, and mid-2021 which signalled many investors were at risk of panicking, and precipitating a bearish trend. pic.twitter.com/8jM7PBqh5z

— _Checkmate 🟠🔑⚡☢️🛢️ (@_Checkmatey_) August 19, 2024

This is because, according to him, a large portion of these assets were purchased when BTC was at a high. Therefore, they cost much more than the current value of the assets. This could be a negative sign for the token’s price soon. After all, if a large portion of these investors panics, there is a chance that the price will drop drastically due to the excess supply that a potential wallet emptying could cause.

On the other hand, investors holding BTC in wallets may be contributing to the asset’s price increase. This is because, by choosing not to put the tokens on the market now, they are reducing the supply of tokens and driving up demand. With more investors employing this strategy, there is a good chance that the token will soon see higher returns.

Other charts from Glassnode point to overall market sentiment

The cryptocurrency market is not only driven by Bitcoin. Investor sentiment can also be decisive for other lower-cap assets. Therefore, another market sentiment chart released by the on-chain company also drew attention. The data considers the investors’ fear and greed index. Regarding the fear of investing now, 28 points were recorded on the chart’s scale. This is a level that had not been reached since December 2022, when the cryptocurrency crisis was in full force.

Crypto Fear & Greed Index drops to 28, remaining in ‘Fear’ zone

The Crypto Fear & Greed Index, provided by software development platform Alternative, stands at 28, down three points from yesterday. Amid weakened sentiment, the index stayed in the “Fear” zone.

The index ranges…

— CoinNess Global (@CoinnessGL) August 19, 2024

These numbers result from a series of events that occurred this year, especially the uncertainty of the U.S. election and the worsening economic crisis in the country. The leading presidential candidates have very different views on encouraging cryptocurrencies. While Kamala Harris adopts a more conservative stance, Donald Trump is a big supporter of tokenization. Therefore, anything can happen.

In addition, the Federal Reserve has been making a series of interest rate adjustments to contain inflation in the country. This causes the indexes to rise and end up burdening consumers. Furthermore, the cost of living in the U.S. is becoming higher, driving some investors away.

Bitcoin price dynamics and projections for the coming days

After tough days, BTC’s value showed a good reaction, indicating that it may surprise this month. The token’s value again surpassed $60,000, tending to find new resistance levels.

The cumulative total for the last month still indicates that the asset fell by about 9.2% during this period. However, there was a good reaction in the last week. The asset grew by about 3.3% since last week and almost 4% in the last 24 hours.

The green signal in the asset’s numbers may be a sign of good times ahead. This could indicate that the token may see good returns in the coming days and once again attract new investors, in addition to those already holding BTC in their wallets.