30 Indian Minds Leading the AI Revolution

Glassnode: Bitcoin HODLing tendencies represent previous market bottoms

With Bitcoin's price spiking above $21,000, 45 percent of investors have experienced an "on-paper loss"

Published: Jul 19, 2022 06:45:44 PM IST

Image: Shutterstock

According to Glassnode, a leading blockchain data and intelligence platform, the bulk of Bitcoin (BTC) has not been HODLed for at least three months, similar to previous Bitcoin market bottoms.

On Saturday, Glassnode tweeted that over 80 percent of the total U.S. dollar money invested in Bitcoin has been untouched for at least three months. The post said, "Over 80 percent of the total USD denominated wealth invested in #Bitcoin has been HODLed for at least 3 months. This signifies that the majority of the $BTC coin supply is dormant, and HODLers are increasingly unwilling to spend at lower prices."

The end of the bear markets in 2012, 2015, and 2018 all experienced comparable amounts of hodling, as reported in the Glassnode chart.

Source: Twitter

In a report titled "The Elusive Bottom," posted on July 12, David David Duong, CFA, Head of Institutional Research at Coinbase, discussed long-term holding:

"Our analysis of Bitcoin positioning based on on-chain data suggests that recent BTC selling has been carried out almost exclusively by short-term speculators. Longer-term Bitcoin holders, on the other hand, have not been selling into the market weakness. These holders own a highly concentrated ~77 percent of total supply, which is down slightly from 80 percent to start the year but still quite high."

He added, "We see this is a positive sentiment indicator as we believe these holders are less likely to sell BTC during turbulent periods." According to Glassnode analysts' July 4 Week on-chain analysis, June was one of Bitcoin's worst performing months in a span of 11 years, with a loss of 37.9 percent. It also stated that Bitcoin network activity is at levels that coincide with the worst of the bear market in 2018 and 2019.

Since November 2021, the number of active companies and addresses has decreased, according to Glassnode, suggesting that neither new nor existing investors are engaging with the network. Additionally, the company reports that the total number of non-zero BTC addresses has risen to 42,530,652—an all-time high.

At the time of writing, the market rate of Bitcoin was $21,013, over 70 percent less than its all-time high of $69,044 in November 2021. According to crypto intelligence company IntoTheBlock, almost 45 percent of Bitcoin owners are experiencing an on-paper loss at the current pricing.

Shashank is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash