Bitcoin holders switch positions: Long-term sellers and short-term buyers shape the market trend

by James · May 4, 2023

Long-term Bitcoin holders are selling, while short-term holders are accumulating, indicating a market trend.
On-chain data suggests that the Bitcoin price reached its lowest point, with a recent uptick in short-term holder calculation and undervalued 18-month to 2-year-old Bitcoin.

One way to gauge whether we are approaching a market top or bottom is by observing the fluctuations in Bitcoin [BTC] inventory. A new market trend was observed where long-term owners of BTC are divesting, while short-term owners are stockpiling. So, what implications does this have for the price of BTC?

Read Bitcoin (BTC) Price Prediction 2023-24

Table of Contents

Bitcoin Long-term and short-term owners exchange positions

According to data from CryptoQuant, there has been a recent increase in the Bitcoin Short-Term Holder SOPR metric. This trend has persisted for most of the year, with the current SOPR level at around 1.04.

In contrast, the long-term holder SOPR also exceeded 1, but its value declined recently. The decline in the holdings of BTC aged between 18 months and two years usually occurs when the price stabilizes before rising to reach a market bottom.

As the market cycle progresses and Bitcoin’s valuation increases, these older holders begin to sell their coins, reducing their overall holdings.

This information can be obtained from BTC UTXO age group of 18 months to 2 years. Conversely, the holdings of short-term Bitcoin holders, which are less than six months old, tend to increase after prices reach their lowest point and continue to rise along with prices, which is the current situation.

Source: CryptoQuant

Bitcoin short and long term MVRV

During previous market downturns, the supply of 18-month to 2-year-old Bitcoins held by their owners usually increased when BTC was undervalued (as indicated by an MVRV ratio largely below 1).

Currently, the two-year MVRV ratio showed that coins within that age range were undervalued and below zero, with a value of -3.2% at the time of writing.

Source: Sentiment

In contrast, short-term BTC holders tend to accumulate coins after the price has reached its lowest point, as is the case now, and continue to do so as the price increases (as reflected by a rising MVRV ratio). At the time of writing, the 180-day MVRV ratio was at 29.66%.

Current price trend on a daily time frame

Bitcoin was still struggling to surpass the $30,000 psychological barrier at press time. However, over the past 48 hours, it has been on an upward trajectory in the daily time frame.

How much is 1,10,100 BTC worth today

At the time of writing, Bitcoin was trading at approximately $29,200, a gain of less than 1%. Furthermore, it is trending above the neutral line on the Relative Strength Index, indicating a bullish trend.

Based on Bitcoin inventory and other relevant metrics, chain data suggests that the price has reached its lowest point.