According to recent data from Glassnode, an on-chain analytics firm, the Bitcoin market for the long term holders has experienced a transition phase. Notably, the transition marks an uptick in long-term holder spending this week.
Data suggests a sharp increase in transaction volumes sent by profitable long-term Bitcoin holders this year. As of data from May 27, marks an almost 2000% surge on YTD basis. The sum transferred by such holders who are currently in a profitable position has risen dramatically from $25 million at the beginning of the year to a staggering $489 million currently.
However, irrespective of this huge increase, the profitable transfer volume has taken a dip by almost 71.4% from its peak value recorded at $1.74 billion. This record transfer volume was observed during the bullish market phase that Bitcoin experienced in 2021.
Nonetheless, it is crucial to note that the current transaction volume, although lower than last year’s peak, still represents a significant rise since the start of this year. Analysts suggest that a closer look at the data highlights interesting patterns when breaking down long-term holder spending by age cohort.
Reportedly, the group of holders that have held Bitcoin for 6 months to 12 months appears to be the most active in terms of spending. This group’s transaction volume is three times that of all other long-term holder cohorts, those who have held Bitcoin for a year or more.
Further, looking into the transaction patterns of the 6-month to 12-month holder group, it is revealed that 92% of their potential acquisition days are currently profitable relative to the current Bitcoin spot price. This significant profitability could well explain why this cohort has seen the highest transaction volumes this year.
Moreover, analysts suggest that this profitability also resonates with the recent surge in overall profitable transfer volume. There has also been a surge in the yearly high spent volume observed among holders with Bitcoin aged between 6 to 12 months. This trend could potentially influence market dynamics and investor behaviors in the coming months.
Importantly, analysts also say that depending on what direction volatility erupts next, a lot of information can be anticipated for the future. Currently, the asset’s volatility is a significant question considering the fact that while the market has been relatively stable, there are chances of high spillage in the near future. The metric could be then employed to locate local periods of overheated conditions, as observed from the lens of Long-Term Holders.
Additionally, as Todayq News reported, recent data suggests that long-term holders of Bitcoin may soon generate selling pressure in the market. One key metric that has been observed by analysts is the SOPR (Spent Output Profit Ratio), specifically when the EMA100 (Exponential Moving Average with a 100-day timeframe) breaks the 1.0 mark. This signifies a potential entrance for profit-taking among long-term holders.
Simultaneously, another set of data suggests that investors are enthusiastically looking up to Bitcoin and the exchange balance has continued to decline. The Bitcoin exchange balance had fallen below 12%, marking the lowest value achieved since this was first achieved at the beginning of the year. As of writing, Bitcoin is trading at $26,878.50, about a 0.04% increase over the past five days.