Bitcoin Market Sees a Return to HODLing, Say Experts

Amidst the indecision of Bitcoin investors following a sharp decline in early August, a clear return to long-term coin accumulation is evident, according to Glassnode.

With the market currently digesting the largest #Bitcoin downtrend of the cycle, indecision amongst digital asset investors remains apparent.

However, below the surface, a distinct return to HODLing and accumulation appears to be underway.

Discover more in the latest Week… pic.twitter.com/dtyrv8dVqz

— glassnode (@glassnode) August 13, 2024

Analysts have noted an increase in HODLing, particularly among large wallet holders often associated with ETFs.

This behavior is tracked by the Accumulation Trend Score (ATS), which assesses the weighted change in market balance. The indicator recorded the maximum possible value of 1.0, indicating significant accumulation over the past month.

Accumulation is characteristic of long-term investors—over the past three months, an additional 374,000 BTC have transitioned into this status.

Despite aggressive distribution from April to July, the spot price remained above the average acquisition cost of “active” coins on the market (Active Investor Cost Basis). Experts view this value as a threshold distinguishing bullish and bearish investor sentiment.

“Prices managed to find support near this level. This […] suggests that market participants generally expect positive dynamics in the short and medium term,” they commented.

Experts applied the CVD metric to analyze the dynamics of net buying and selling balance on CEX and found a predominance of the latter since the formation of the ATH.

Sideways movement in recent months has led to a noticeable slowdown in the distribution pace of coins by HODLers. As a result, the share of “network wealth” belonging to this group first stabilized and then began to grow again. The indicator remains historically high compared to previous ATH breakthroughs.

“In other words, there is potential for further pressure from long-term investors if prices rise in the future. HODLers are in no hurry to part with their coins at lower prices,” specialists explained.

The Sell-Side Risk ratio for long-term investors confirms the previous observation. The indicator remains at a lower level compared to previous ATH breakthroughs.

In other words, the size of the profit obtained is relatively small compared to previous market cycles—HODLers are waiting for higher prices before returning to active sales.

Earlier, Glassnode determined that most Mt.Gox payout recipients do not intend to sell their coins. This potentially mitigates the scale of bearish pressure in the coming weeks.

Back in April, former BitMEX CEO Arthur Hayes predicted that the price of the first cryptocurrency would recover from the decline caused by price strengthening and rise to $100,000.