- Bitcoin’s price has experienced a drop, coinciding with a decrease in the rate of accumulation across all cohorts.
- Despite the market fluctuations, Bitcoin addresses continue to hold their coins, with most being unprofitable at the moment.
- The behavior of these holders is largely dictated by their profitability, with many waiting for their Bitcoin to turn profitable before selling.
Bitcoin’s price drop and the slowing rate of accumulation raise questions about the future of the cryptocurrency. Will holders continue to hold, or will they sell as soon as their Bitcoin turns profitable?
Bitcoin Price Drop and Accumulation Slowdown
Bitcoin’s price has recently fallen towards the $61,000 mark, causing a surge in skepticism amongst holders and traders. One of the reasons for this is the declining accumulation for Bitcoin observed across the board. This trend began in May, which coincided with a local price bottom for Bitcoin. Over the past 30 days, all cohorts combined have added roughly 10,000 Bitcoin to their holdings, a number that pales in comparison to the 19,000 new Bitcoins that were created in the same period.
Holder Behavior and Profitability
One of the factors that will dictate the behavior of these holders is their profitability. Analysis of Santiment’s data revealed that the MVRV ratio for Bitcoin had remained in the red, indicating that most Bitcoin addresses were holding their coins at a loss. Most addresses are willing to wait until their Bitcoin turns profitable before selling their holdings. Another key factor that will play a role in determining the behavior of holders is the Long/Short ratio. Over the past month, the Long/Short ratio for Bitcoin has fallen significantly, indicating that short-term holders are slowly starting to outnumber long-term holders.
Future Outlook
These short-term holders are much more likely to panic sell their holdings at times of market uncertainty and may add to the selling pressure faced by Bitcoin. At the time of writing, Bitcoin was trading at $61,533.04 and its price had fallen by 1.50% in the last 24 hours. Moreover, its trading volume had declined by 1.77%. If the current trends continue, Bitcoin’s price may continue to decline or stagnate at best.
Conclusion
The recent drop in Bitcoin’s price and the slowing rate of accumulation raise questions about the future of the cryptocurrency. However, the behavior of Bitcoin holders, many of whom are waiting for their holdings to turn profitable before selling, could play a crucial role in determining Bitcoin’s future trajectory.
