- Bitcoin’s sell pressure has significantly reduced over the past two months, with long-term investors holding onto their BTC for longer periods, according to crypto analytics firm Glassnode.
- Bitcoin’s “Value Days Destroyed (VDD) Multiple” has seen a significant cooldown, indicating a return to accumulation mode.
- Large Bitcoin price corrections during a bull run are typically driven by long-term holders cashing out when the Bitcoin price rises substantially above their average purchase price.
Bitcoin’s sell pressure wanes as long-term investors hold, marking a shift back to accumulation mode, according to crypto analytics firm Glassnode.
Bitcoin’s Sell Pressure Decreases
Bitcoin’s sell pressure has significantly reduced compared to two months ago. More long-term investors are holding onto their BTC for longer periods, according to crypto analytics firm Glassnode. The firm’s lead analyst, James Check, noted that Bitcoin’s “Value Days Destroyed (VDD) Multiple” has seen an “epic cooldown” over the past few weeks, indicating a return to accumulation mode.
Understanding the Value Days Destroyed Multiple
The VDD Multiple is an on-chain metric that compares near-term Bitcoin spending behavior to its yearly average, with a focus on coins that haven’t moved in a long time. The ratio rises when long-term holder selling is relatively high and falls as investors pivot back to HODLing. Check explained that the current cooldown indicates that old coins have stopped moving on-chain, allowing breathing space for new demand bids to hit a lack of supply.
Impact of Long-Term Holders on Bitcoin Price Corrections
On-chain analysts have observed that large Bitcoin price corrections during a bull run are typically driven by long-term holders looking to cash out when the Bitcoin price rises substantially above their average purchase price. While the total long-term holder supply generally rises over time, it has historically fallen precipitously during Bitcoin’s largest bull runs, such as in early 2021 and early 2024.
Bitcoin Whales Absorb BTC After Price Drop
Late last week, CryptoQuant CEO Ki Young Ju reported that active Bitcoin whales had absorbed 47,000 BTC over 24 hours after Bitcoin’s price fell below $57,000 at the start of May. Check said at the time that the price drop looked like a standard bull market correction—and argued that it was a good time to buy the dip.
Conclusion
The recent cooldown in Bitcoin’s VDD Multiple and the increased holding period by long-term investors indicate a shift back to accumulation mode. This could potentially lead to a lack of supply and create room for new demand bids. However, it’s crucial for investors to keep an eye on market trends and make informed decisions.
