On-chain data shows that short-term Bitcoin holders were behind the recent selloff that drove the cryptocurrency’s price below $36,000.
Bitcoin investors holding coins between 1 day and 6 months old sold in bulk yesterday
As pointed out by an analyst at CryptoQuant mailHowever, short-term holders appear to have sold off the heaviest selling during the recent sell-off.
The relevant pointer here is “exchange flowwhich measures the total amount of coins that move into exchange wallets.
A modification of this metric is the “age ranges of drain-outlet depletion output”. It tells us how different groups of Bitcoin owners contribute to the flow.
The different groups are broken down based on the number of days the investors held their coins before transferring them to the exchange.
The age range of the coin is from 1 day to 6 months generally.short term owners(STH). Usually this group is the most likely to sell their coins.
All investors who hold their bitcoins for longer periods of time are “Long Term Holders” (LTH). Now, here is a graph showing the trend in the 6-month and 6–18 month age group flows over the past few months:
Looks like STH inflows spiked up recently | Source: CryptoQuant
As you can see in the chart above, the one-to-six-month coin group sent a huge amount of coins just yesterday.
The high inflow amounted to more than 60 thousand coins being transferred by this group. Investors usually send their bitcoins to exchanges for selling purposes, and then these coins participate in the sale that has now brought the price below $36,000.
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On the other hand, the 6- to 18-month pool doesn’t seem to have moved much coins over the past day.
Older Bitcoin LTH blocks have not shown much activity lately. The chart below shows the trend in inflows.
The 1.5-year to 3-year cohort only looks to have sold around 500 BTC yesterday | Source: CryptoQuant
Of these trends, it appears that the only investors that got into the sell-off yesterday were the short-term owners, who are generally the most volatile. Long-term stockholders are still looking to hold strong.
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At the time of writing this report, Bitcoin price It is floating around $35.8K, down 8% in the past seven days. Over the past month, the cryptocurrency has lost 21% of its value.
The chart below shows the currency price trend over the past five days.
The price of Bitcoin seems to have plummeted down over the past day | Source: BTCUSD on TradingView
Featured image from Unsplash.com, Charts from TradingView.com, CryptoQuant.com