Bitcoin Price Could Slide To $24,000 As Short-Term Holders Take Profit: Glassnode

Bitcoin has not moved much lately, and that is having a ripple effect on most cryptocurrencies apart from newly launched meme coins like PEPE.

This week, the leading cryptocurrency by market capitalization mainly traded sideways, creating a tight price squeeze heading into the weekend. On Friday, Bitcoin was trading at $29,000, up 0.33% in the past 24 hours and down roughly 1% in the past week.

According to onchain analytics firm Glassnode, Bitcoin’s recent behaviour can be pointed to constant selling by short-term holders.

Short-Term Holders Offload BTC

In its latest weekly on-chain newsletter, the firm noted that whereas the majority of supply remains held by longer-term, the weight of short-term investors is currently prevailing over the price action within the uptrend.

“Among both Long-Term and Short-Term  Holder cohorts sending coins to exchanges, the dominance of the Short-Term Holders remains a consistent 90%-95% of total inflows,” wrote Glassnode. “Of note is the increase of profit taking by STHs in 2023, denoted by the deeper dark red zone, which accounts for 58% of exchange inflows at present.”

As per the firm, since early Jan, there have been two waves of profit-taking by short-term holders, surpassing the total profit taken by long-term holders. “Within the current market, the second wave of short-term holders profit realization aligns with the recent correction,” it added.

The firm noted that as this cohort continues to sell its coins, the market will likely experience volatility, and Bitcoin could slide lower.

“We observed that sell pressure by new investors was a key driving force that established resistance at $30k. Should this present correction resume, the cost basis of the young supply holders at $24.4k may well be a psychological level to monitor in the weeks ahead.”

Large Whales Deviate To Buying

However, it is important to note that as small-term holders continue to take profit, large whales with over 10,000 BTC seem to be accumulating. On Friday, Glassnode tweeted that this group has shifted “from a distributive regime to one of aggressive coin absorption.”

“Checkmate”, the lead onchain analyst at the firm, later clarified the tweet, noting that this metric excludes exchanges. Instead, he noted it showed the behaviour of ‘ETF-style sinks though like MicroStrategy, large institutions, GBTC, and WBTC over the last 30 days. This implies that these institutions could have significantly prevented Bitcoin’s price from declining recently.