Key Points
- Despite the crypto market’s significant downturn, long-term investors are holding onto their assets.
- Bitcoin’s price remains strong despite sell-offs, indicating continued market strength.
The crypto market is currently experiencing a substantial downturn, the most severe of this cycle. Yet, long-term investors seem to be maintaining their assets rather than selling them off, according to data.
Bitcoin and the Resilient Investor Base
Bitcoin is dealing with a significant downtrend in the current cycle. However, recent data indicates a shift towards a more patient and resilient investor base. A report from Glassnode on August 13th revealed that the market is going through its “largest downtrend of the cycle,” following an extended period of aggressive distribution by investors.
Despite the challenging circumstances, there is an emerging trend among long-term holders to keep their assets rather than sell them. This signals a shift in investor behavior towards “hodling.”
Trends in Accumulation and Market Strength
The Accumulation Trend Score, a measure of market-wide accumulation patterns, has hit its peak value of 1.0, indicating a return to accumulation. Glassnode reports that this group has now “returned to a preference for HODLing, with a total volume of +374,000 BTC migrating into LTH status over the last three months.”
Despite aggressive sell-offs from April to July, the spot price of Bitcoin has remained above the Active Investor Cost Basis. This suggests the market continues to be strong, according to the blockchain research firm.
The report also points out that the adjusted Spot Cumulative Volume Delta metric has been negative, indicating persistent net sell-side pressure. However, the LTH Sell-Side Risk ratio remains at a “lower level” compared to previous all-time high breaks. This implies that the amount of profit taken by the LTH cohort is “comparatively small relative to previous market cycles,” Glassnode states.
The firm also suggests that this cohort is waiting for higher prices before increasing their distribution pressure. With Bitcoin’s price hovering around $60,000, investors seem to be waiting for “higher prices” before adjusting their holdings. This suggests a patient, long-term outlook despite the ongoing spark of volatility.
