The sales of Bitcoin bought more than a year ago are low as long-term investors maintain a confident position. Many coins go into wallets, indicating little intention to make transactions in the short term.
There are times when Bitcoin investors are confident that the price will go up, so they decide to buy. However, mistrust increases at other times, and most choose to sell their holdings. Market participants are currently optimistic, intending to hold positions for the long term.
The sales volume of Bitcoin bought over a year ago has remained low. In other words, long-term investors are confident and do not sell their holdings.
In addition, investors bought less Bitcoin than less than six months ago, so its volume is at minimum values. Most of them keep coins bought more than six months ago in their wallets, denoting greater confidence and the desire to maintain positions.
There Are more Inflows than Outflows of Bitcoin on Exchanges
The variation of the net position of Bitcoin on exchanges, minus the amount of Bitcoin that goes to wallets, indicates a significant outflow. Therefore, investors may have no intention of making transactions in the short term. That leads them to choose to store their holdings in cold wallets, where they can sell them when they deem appropriate.
There were variations in the average value of the Bitcoin sold on a given day and the purchase price. In other words, if the value is greater than 1, investors had positive returns. Meanwhile, if the value is less than 1, investors made losses when selling that day.
According to analysis, that indicator is always at highs before a considerable drop. For example, the price of Bitcoin fell by more than 80% until it reached its bottom in December 2017. Furthermore, the value dropped by more than 70% in June 2019 and corrected by more than 50% in May 2021.
For that reason, selling today may not yield significant returns to average investors. Besides, the price could rise further before investors sell their holdings for better returns.
A Greater Number of Users Trust Cryptocurrencies
The analysis also shows that the number of new addresses has increased, indicating that many new investors are adding confidence to the world of cryptocurrencies.
The current market shows a moment of confidence where most investors want to hold positions thinking about another time horizon. They expect the price to go up enough to receive better returns from the sale of their holdings.
It is necessary to remember that many successful Bitcoin investors buy Bitcoin when its price is low. Even companies like MicroStrategy and Tesla have acquired Bitcoin to keep it as a store of value on their balance sheets.
The trust in Bitcoin remains high thanks to its ability to recover from crises like the current one. Many even buy it as a hedge against inflation in countries where the national fiat currency loses value. For example, Venezuela has turned to cryptocurrencies to deal with the critical economic situation its citizens are suffering.
By Alexander Salazar
