There has been a high demand for Bitcoin in the current price zone and close to USD 60,000. Investors have kept their coin holdings in the long term, from before the maximum price.
The price of Bitcoin (BTC) has been dropping and rebounding steadily for several weeks. It has fluctuated between USD 33,000 and USD 45,000 since January. It has even oscillated in a more closed range, between USD 38,000 and USD 43,000 per unit.
An explanation is that most investors have their entry prices for the asset in those ranges, according to analytics firm Glassnode.
They state in their research that long-term holders have re-accumulated a large amount of coin supply between USD 38,000 and USD 45,000. That has been the primary price range of the current consolidation of the Bitcoin market.
The Glassnode charts show around 2 million BTC last bought or moved between USD 35,000 and USD 42,000. That represents over 10% of the 19 million BTC currently in circulation. Many Bitcoin users purchased their cryptocurrencies at a similar price in recent days. In other words, they could defend those prices as they have not reported millions in losses.
That figure turns that price zone into one of the most on-demand. A behavior by investors that Glassnode describes as insensitive to price changes complements it.
Much of the volume profile of January 22nd, around USD 33,000 per BTC, is still intact. Despite an additional 2.5 months of sideways consolidation, a large proportion of the market seems unwilling to spend and sell their holdings. They do it even though their coins are at a loss, suggesting that much of the supply of holders insensitive to prices is below USD 40,000.
The Outlook for Long-/Short Term Investors
As to whether short-/long-term investors are accumulating or selling BTC, Glassnode shows the trend of each market player regarding Bitcoin.
They estimate that almost everyone who bought after the all-time high of around USD 69,000 is a short-term buyer or owner. In other words, since there are more speculators than investors, they are more likely to spend their coins as a reaction to market volatility.
On the contrary, most investors that own BTC bought before the all-time high hold their positions in the long term. Then they would be less likely to sell or spend their coins, preferring to accumulate ahead of the upcoming macro bullish market.
The report also clarifies that the zone, close to USD 60,000, has been in high demand for buyers. Between USD 57,000 and USD 63,000, there is another accumulation zone with a large amount of Bitcoin traded at that price in recent months.
Beyond illustrating buying or selling zones, that data shows a relatively constant demand for BTC on the way up and down. That reading indicates that people want to accumulate BTC regardless of its price.
That behavior is a positive sign for the market in the long term, as more investors are unwilling to sell at a loss. That could mean that they still view the market optimistically and believe that the price will rise again.
By Alexander Salazar
