The behavior of Bitcoin holders has always been markedly different. Short-term investors typically act much faster than long-term investors, and they always sell and buy more frequently than others.
Some of these short-term investors, on the other hand, know how to build their portfolios and eventually become mid- to long-term holders.
The question is whether we can expect any systematic behavior this time.
Yes, there are HODLers, but what kind are they?
Short-term traders/holders (STH) are known to profit when the market is at its peak. Some, on the other hand, HODL for an extended period of time in the hopes of a rally. Others retreat as soon as they detect a buildup of bearish momentum.
This can be seen in instances from 2018. Participation increased in January, when Bitcoin was nearing its previous all-time high of $20,000. STHs were at their peak, and the subsequent bullishness lasted for months.
Despite the fact that price movement was relatively flat, by November 2018, mid-term holders had reached their peak.
When BTC fell in November 2018, however, all mid-term holders sold their holdings as well.
Mid to long-term holders (LTH) are not easily scared. If you look at investor behavior during random price drops, whether in October 2019 or March 2020, you’ll notice that selling was kept to a minimum.
This demonstrates that these investors begin accumulating when bullish momentum begins, but they do not sell during the initial crash. They only sell their holdings when the bearish momentum peaks or when they want to take profits.
What comes next?
As a result of the market’s increasing bullishness, the number of mid-term holders has increased again and is now at a 2-year high, accounting for 19.7 percent of all supply. These are BTC holders of coins ranging in age from 6 to 12 months. This means they did not sell during the ATH, crash, rally, or consolidation that occurred since April.
In fact, the longest Bitcoin holders (those who have held the currency for more than ten years) have not flinched. In fact, their holdings have increased and now account for more than 12.25 percent of the supply – approximately $124 billion.
Although it is possible that these are lost coins, wallets from pre-ASIC era miners, or simply HODLers, this cannot be said with certainty.
The key point is that because these MTH and LTH did not sell in September, when BTC fell by 16.85 percent, they should not sell now, given that BTC has already risen by 27.07 percent in the last week.