Long-Term Bitcoin Holder Dominates Market, According To Glassnode Report

Bitcoin, the world's largest crypto asset by market cap. (Photo; Doc. Pexels)

JAKARTA - In a recent report from blockchain analytics firm Glassnode, it discusses the movement of bitcoin (BTC) among investors and its impact on the crypto market. The study looks at how coins move from long-term holders holding them during the period of price down to short-term speculators seeking profit from price fluctuations.

Glassnode uses a metric called "realized capital," to track the movement of coins. This metric measures the total amount it has paid history to get all the bitcoins in place. This helps see when the coins were last moved between investors.

The company has also grouped bitcoin supplies into "age groups" to show inactivated coin distribution for various periods of time.

During the bullish trend, old coins switch from long-term holders to newer investors. However, as long as the trend goes down, speculators lose interest and slowly transfer coins to long-term holders.

Major long-term holding groups are those holding bitcoin for 1-2 years. Their holdings peaked when the market was in bearish condition as they believed in these assets. On the other hand, short-term holders are those holding bitcoin for less than a month. Their supply grew during the bullish trend as there was a flow of new funds.

By analyzing their second holdings, Glassnode is trying to understand the market cycle. Currently, the market is showing signs of recovery after being in a large bearish condition, similar to 2016 and 2019. Bitcoin prices have recovered from their lows, but long-term holders still control more than 80% of supply.

"Bitcoin supply is still highly controlled by long-term holders, with the majority of coins over 6 months old," the report concluded.

In addition to seeing the age of coins, Glassnode also analyzes the profitability of long-term and short-term holders based on the average cost base. This helps to understand whether it is more profitable to sell or hold assets at a certain price level. The company model suggests that the market may have entered an early bullish phase where long-term holders are starting to profit, while short-term traders are close to breaking points.

According to the latest data from Coingecko, global crypto market capitalization currently reaches IDR 17.161 trillion, an increase of 1.08% over the past day. The total volume of the crypto market over the past 24 hours was IDR 916.49 trillion, an increase of 67.92%.