Long-term Bitcoin holders are accumulating the coins they sold to short-term investors in the spring, which bodes well for the future. Bitfinex specialists came to these conclusions.
“Hodlers exhibit this behavior at the beginning of bull markets when they quickly take profits on some of their spot assets and then re-accumulate them after a flash crash or period of market downturn.” – the document says.
According to analysts, the current period can be characterized as a temporary capitulation – the market is in limbo after a sudden decline in prices, when there were a large number of liquidations. At this time, there is often an exchange of coins from short-term to long-term investors.
Experts pointed to price dynamics since the beginning of the week – speculators began to get rid of coins purchased at the beginning of the week after a price jump of 3%, which is “typical behavior for them.”
They illustrated their conclusions on the HODL Waves chart. Black rectangles highlight “waves” with a retention period from two to eight years or more, red rectangles – up to three months.
The analysts also cited data from CryptoQuant, which shows that “a group of short-term holders are at a loss, leading them to abandon the very coins they previously bought from hodlers.”
In an interview with The Block, Crypto Quant analyst Adam Murad drew attention to the latter’s withdrawal of their coins from centralized platforms. He estimates that following the recent price spike, over 10,000 BTC went to cold wallets.
Bitfinex suggested that long-term investors have become more confident in the macroeconomic outlook. The assessment is based, among other things, on the latest inflation report, which did not affect the reluctance Fed continue tightening monetary policy at the upcoming meeting on September 20.
QCP Capital analysts linked Bitcoin’s recovery above $27,000 on Wednesday to rumors that the start of distribution of funds to Mt.Gox clients would be postponed to 2024.
The process was expected to be completed by October 31, 2023. Currently, Mt.Gox has 142,000 BTC ($3.9 billion), 143,000 BCH ($17.9 million) and ¥69 billion ($523 million) at its disposal – ~20% of the hack amount.
“We believe that many did not count on the transfer. An official announcement will undoubtedly lead to a short squeeze identical to the publication of a court decision in business SEC vs Grayscale“, – they explained.
QCP Capital experts remained bearish on digital gold for the fourth quarter, citing a potential shutdown of US government funding on October 1 and rising oil prices.
They named $22,000 as a target rate in October. The scenario will be canceled if $32,000 is broken through.
“In this scenario, without the Fed easing policy, stocks will likely fall, and so will cryptocurrencies,” – the experts concluded.
Previously, BitMEX co-founder Arthur Hayes admitted a possible short-term departure of Bitcoin below $20,000 followed by a new bullish impulse. However, in September he pointed to the positive outlook for digital gold, contrary to the Fed’s policy.
Recall that the founder of Edelman Financial Engines, Rick Edelman, predicted the price of the first cryptocurrency to rise to $150,000 by the summer of 2025.
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