Looking at the on-chain data shows apparent differences in how short- and long-term holders invest in Bitcoin. Short holders have been buying mostly between the $17k and $48K levels, while long holders are strong up to $60k.
We can analyze some key graphs to better understand the data. UTXO Realized Price Distribution (URPD) shows at what prices the current set of Bitcoin UTXOs were created. Each bar indicates the number of existing bitcoins that last moved within that specific price segment. The price specified on the x-axis refers to the lower limit of that segment.
After shrinking 75% from this year’s all-time high, 11.5% of supply currently hovers around the $17,000 price level. The increase in holdings between $17k and $24k may indicate that a large amount of demand has been absorbed. Below $17,600, all coins that have not moved should be defined as long-term holders, as Bitcoin has not fallen below this price since 2020. However, these investors can be considered mature long-term holders. The coins are lost or the owners are not willing to sell until now.
Figure: 1 | Source: Glassnode
The chart below shows the type of cohorts buying at these price levels. The version adjusted by entity of the URPD Metric offers the offer segmented by Long-Term Holders (blue), Short-Term Holders (red) and Stock Market balances (grey). The entire supply is displayed in the price segment at which the respective entity (on average) has purchased its coins.
Regarding the short-term holders (holding BTC for less than 155 days), you can see the transfer of ownership from the long-term holders to the short-term holders around $20k, from the sellers capitulating the holders long term to HODLers or investors. They see value in these price ranges.
There is strong buying at psychological levels from short and long holders at 20,30 and 40k. There is a large supply of long-term starters currently under water. It will be interesting to watch if short-term headlines turn into long-term headlines in the 40-50k range.
Shrimp cohorts with less than 1 Bitcoin have been accumulating Sat relentlessly across all price ranges. Shrimp appear unfazed by the price action and have bought a significant amount of Bitcoin at current lower price levels compared to similar historical price ranges. The black vertical bar shows the market price at the production timestamp of the chart.
Interestingly, most of the exchange coins were bought between $30k and $49k with very little, if anything, above $40k. This information is crucial when evaluating the liquidity of an exchange that has Bitcoin on its balance sheet. At the current level of $23,800, exchanges are about 65% underwater on the coins they have not sold.
There have been fewer purchases by exchanges below $30k. However, around 350,000 BTC were bought at the psychological level of $20,000, totaling around $7 billion at the time of the sale. Addresses with less than 10k Bitcoins mostly defended the level.
The following tweet from Prof. Chaine shows an animated version of the UDRP graph over time.
On peut aisément voir cette dynamique prendre forme et l’offre changer de propriété des que le prix a invalidé le level des 20k $
Depuis, près 2.6 million BTC, so 13.9% of the circulating supply on été échanges between $17.8k and $22.5k pic.twitter.com/zIDsJWhCpz
— Prof. Chaine (@profchaine) July 28, 2022
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This post How Short-Term Bitcoin Holders Invest Differently Than Long-Term Holders Based on On-Chain Data
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