2020 Bitcoin Buyers Hold BTC Firmly Despite $109,000 All-Time High
While Bitcoin reached a historic price high above $109,000 in late January, the level of selling pressure on the market has not met expectations shown by analysts.
Popular on-chain analytics company Glassnode has recently revealed that currently Bitcoin sales remain “significantly below” the peaks seen during previous bull cycles. This shows that investors are not rushing to dispose of their holdings and are perhaps waiting for bigger price highs to happen.
2020 Bitcoin buyers show their firm grip on BTC
This trend of hodling tight is typical of those who bought their Bitcoin over the past three or five years – that’s between 2020 and 2022. While they are seeing quite big unrealized profits, including those investors who purchased Bitcoin in 2020 at $3,600 (that’s when crude oil shocked the market by crashing under zero), those investors won’t sell. They are displaying surprising resilience in their persistence to hold on to their BTC. Glassnode shows that this group of investors maintains the lion’s share of the circulating Bitcoin supply.
Meanwhile, according to the Glassnode report, those who bought Bitcoin between five and seven years ago gladly dumped their BTC at the $109,000 price peak, exiting positions and leaving with pockets full of cash.
Even though the share of BTC owned by midterm bitcoin holders has shown a significant decrease (it has dropped by three percentage points after reaching a peak in November), it is sitting at quite high levels nevertheless. This could mean that even as Bitcoin continues to advance to higher price levels, those investors still prefer to keep their BTC to themselves.
Unlike mid-term holders (STHs), the cohort of short-term investors has reacted to the Bitcoin price surge more eagerly. This kind of traders are typically very sensitive to price volatility, therefore they enter the market when prices begin to log a drastic increase. Over the last half year, as a report published by another on-chain data company, CryptoQuant, revealed, many STHs panic-sold their Bitcoin as the largest crypto demonstrated corrections up to 30% after reaching new all-time highs.
Still, compared to Bitcoin’s previous bull runs, speculators are not as active now, according to Glassnode data.
Currently, short-term investors are sitting on roughly 40% of Bitcoin’ network wealth, while earlier this year, they reached a peak of about 50%, Glassnode reported. This shows that while some speculators are happily selling, still the level of euphoria is light years away from what the market faced during previous Bitcoin price peaks.
Institutional investors betting on Bitcoin
Institutional investor sentiment is one of the most important drivers shaping the current dynamics of the Bitcoin market. Top financial companies, hedge funds, pension funds, and publicly traded companies continue to increase their exposure to Bitcoin. This certainly helps to strengthen long-term BTC holding trends in the market.
Institutions prefer a more long-term strategy unlike many retail investors and speculators. Thanks to spot Bitcoin ETFs and Bitcoin ETPs, the flagship crypto is experiencing a stronger integration in conventional financial markets. Those players are unlikely to start panic-selling, thus also preventing retail sell-offs and contributing to BTC price stability as it is going higher.
Some publicly traded companies, like Strategy and Metaplanet, continue to stack Sats regardless of price swings, raising funds for new Bitcoin purchases from investors. This week, Strategy purchased almost $2 billion worth of BTC and Metaplanet acquired 696 BTC and 160 BTC worth $13.9 million and $60.6 million. Strategy spearheaded by Michael Saylor now holds slightly more than half a million Bitcoin. Metaplanet’s stash so far contains 4,206 BTC.
What it means for BTC price in the future
The fact that mid-term holders are reluctant to sell at the current highs (even though, Bitcoin is trading well below $100,000 now) speaks of strong market confidence. This ensures market participants that Bitcoin price still has higher levels to reach. Besides, the correction is not as big and swift this time as it was during previous Bitcoin peaks – this shows that investors are rather inclined to hold long-term.
Short-term BTC investors continuing to hold also speak in favor of the fact that the Bitcoin market has not yet reached its top and has not triggered mania among speculators. Overall, future Bitcoin price movements will be down to several powerful drivers – institutional interest, regulatory developments, macroeconomic conditions, etc. One thing is for certain – many investors who bought Bitcoin in or after 2020 intend to hold BTC tight in their wallets. At least until it reaches the levels where they expect it will be worth selling.
