According to recent data from Glassnode, an on-chain analytics firm, since the turn of the year, the Bitcoin short-term holders have been in a rather comfortable position. The firm says that the short-term holders have experienced a significant profit drive regime since the start of the year.
Data suggests that while short-term investors have been enjoying a profit regime for the past months, there has been a different trail recently with the decline in prices. Glassnode writes that as spot price continues to trend lower, the short-term holder Realized Profit / Loss Ratio approaches a decision point which can be described as the equilibrium. The graph below shows the realized profits / loss ratio for the short-term Bitcoin investors.
According to analysts, the points mentioned as support and breakdown have their respective significance in the graph. The support point is when the realized profit / loss ratio is bouncing off the equilibrium position, which would be considered constructive. On the contrary, the breakdown point is when the short-term holder realized profit / loss ratio is decisively breaking below the equilibrium position, which would suggest weakness in the market.
Hence, as highlighted in the graph, currently the market for the investors has been in a declining phase and has just touched the equilibrium point. Notably, the further course will shape the losses or the gains for the market.
Simultaneously, in terms of investors’ cohorts based on the holdings, data suggests that the smaller investors i.e. the shrimps and crabs have been the most resilient in the past year. According to Glassnode, following the collapse of Terra LUNA ecosystem in May last year, Bitcoin entities holding less than 10 Bitcoin have been hopeful of the market despite the turbulence.
Notably, these groups increased their relative share of the circulating supply last year placing their bids on the asset amidst the prolonged bear market. Data suggests that relative share in the circulating supply over a year i.e. following the collapse of LUNA has increased from 13.72% to 17.54%. The surge represents a 3.82% increase which is equivalent to 790,000 Bitcoin.
The shrimps have been one of the most active cohorts in the past week even when the market was stunned by the regulatory crackdown in the United States. The Securities and Exchange Commission (SEC) filed charges against two major crypto exchanges which led to significant outflows from the exchanges as well as inflows in general.
According to Glassnode, when analyzing the withdrawals by USD size the transactions below $10million in size have seen consistent withdrawals, with a net outflow of over $130 million per day maintained all week. However, transactions above $10 million in size have seen consistent deposits, with inflow rates ranging between $15 million and $30 million per day.
This suggests that very large entities (such as institutions) are affected to a greater extent by the SEC news as compared to smaller entities. However, it remains to be seen if this becomes a more sustained trend over coming weeks.
Based on the holdings size, Todayq News reported that while while-term holders are on the periphery or the equilibrium, the long-term holders have been relatively calm. In fact, the short-term holders have continued to increase their holdings and the inter-exchange transfers have dropped. This suggests the growing favoritism for self-custody and the waning trust on the exchanges amid the regulatory crackdown.