“The data show HODLers are buyers here,” one research firm noted.
As a result of calls for more substantial price drops, investors with longer-term horizons seem to be increasing their Bitcoin holdings are the price continues to struggle to break the key technical levels.
Glassnode data shows that the bitcoin “hodler net position change”, which tracks the net buying and selling activities of people who hold bitcoin for six months or more, has been positive for the first time since the end of October. Hodl is a crypto slang term held.
“This shows that holders are the buyers here,” Delphi Digital said in its daily market commentary dated June 16. “The net position of BTC holders is a powerful indicator of how long-term investors view BTC.”
According to data from Glassnode, the supply held by long-term holders has increased from 11 million to more than 11.6 million in the past few weeks.
Although holders are now injecting bullish pressure on the market, this does not necessarily mean that there will be a sharp rebound. Past data shows that after the holders continue to accumulate, the bullish trend has mostly accelerated.
For example, this indicator remained positive for most of 2018, which was a negative year for Bitcoin, and early 2019, when cryptocurrencies were still below $5,000. In the second quarter of that year, bullish sentiment returned to the market, pushing the cryptocurrency to $13,880 by the end of June.
After a lapse of 16 months, Bitcoin reached its peak in October 2020. During this period, cryptocurrencies were mainly in a bearish trend, falling from US$13,000 to US$4,000 between August 2019 and March 2020. The holders were net buyers throughout the entire and subsequent recovery period, and the token distribution began in November.
It remains to be seen whether they will continue to be net buyers in the coming weeks and restore confidence in the hit market.
However, some chart analysts worry that cryptocurrencies may see more selling in the short term, as the daily chart shows that the 50-day and 200-day simple moving average (SMA) will be in the next two days.
According to Kraken’s research, the previous death cross event on the daily chart coincides with the “continued macro downtrend of the subsequent days of selling or confirming a bear market.”
If U.S. Treasury yields rise further, macro funds that buy Bitcoin as a means of hedging may be sold. The US two-year Treasury yield hit a 12-month high of 0.219%, and the 10-year Treasury yield rose nearly 10 basis points to 1.59% on Wednesday. Earlier, the Fed hinted that the interest rate hike was earlier than some people expected.
Bitcoin’s current trading price is approximately $38,850, an increase of two percent on the day.