The surge in short-term investments has been attributed to the increasing popularity of spot Bitcoin ETFs. This surge has resulted in a significant rise in combined holdings from 2.2 million BTC in January to over 3.4 million BTC by mid-April, reflecting a 55% increase. However, short-term holders also contribute to vulnerability and price fluctuations, which can pose potential risks or lead to price drops. The number of short-term holders is steadily rising due to new players entering the market and buying Bitcoin.
Meanwhile, the price of Bitcoin remains relatively stable as older coins are being distributed, indicating a market reset. It is projected that the $60,000-70,000 price point will become the new floor for BTC, akin to how $10,000 became a base in 2020. Currently, short-term holders possess approximately 3.3 million BTC, a slight decrease from the mid-April peak resulting from the market correction in March following Bitcoin’s all-time high. Recent data indicates that the trend of selling Bitcoin has stalled, and long-term holders have begun accumulating Bitcoin.
The amount of Bitcoin held by investors for over a year has remained almost unchanged, suggesting that these investments are being held onto rather than actively traded. Moreover, only about 0.03% of the supply held by long-term investors comprises coins that were bought at prices higher than the current spot price. In the early stages of a bull market, it is typical to observe long-term investors maintaining their profitable positions.