Long-term bitcoin holders are accumulating coins they sold in the spring to short-term investors, a development that bodes well for the outlook, according to Bitfinex.
“This behaviour is typical of hodlers at the outset of a bull market, when they quickly take profits on part of their spot positions and then re-accumulate them after a sudden drop or a period of market pullback,” — the document states.
According to the analysts, the current period can be characterised as a temporary capitulation — the market is in a suspended state after a rapid price decline that saw a large number of liquidations. During this time, coin flows from short-term to long-term holders often occur.
Analysts pointed to price action since the start of the week — speculators began disposing of coins bought earlier in the week after a 3% price jump, which is “typical for them” behavior.
They illustrated their conclusions with the HODL Waves chart. The waves held for two to eight years and longer are highlighted with a black rectangle, while red marks holdings up to three months.
Analysts also cited CryptoQuant data, which show that “the group of short-term holders is in the red, prompting them to shed the very coins they had previously bought from hodlers.”
In an interview with The Block, CryptoQuant analyst Adam Murad drew attention to the withdrawal of his own coins from centralized platforms. He estimates that, following the recent price jump, more than 10 000 BTC moved to cold wallets.
Bitfinex researchers suggested long-term investors had grown more confident in macroeconomic prospects. The assessment is based, among other things, on the latest inflation report, which did not dent the ФРС‘s reluctance to tighten monetary policy further at the upcoming September 20 meeting.
Analysts at QCP Capital linked Bitcoin’s move above $27,000 on Wednesday to rumours of the transfer of Mt. Gox client funds into 2024.
The process was expected to finish by 31 October 2023. Mt. Gox currently holds 142 000 BTC ($3.9bn), 143 000 BCH ($17.9m) and ¥69bn ($523m) — about 20% of the stolen total.
“We believe that many did not anticipate the transfer. An official announcement will undoubtedly lead to a шортсквизу, identical to the publication of the court ruling in the SEC against Grayscale,” — they explained.
Experts at QCP Capital kept a bearish stance on digital gold for Q4, citing the potential cessation of US government funding and rising oil prices.
As a reference for October, they named $22,000. The scenario would be invalidated if Bitcoin breaks through $32,000.
“Under such a scenario, without a softer Fed policy, equities are likely to fall, and so will cryptocurrencies,” — the analysts concluded.
Earlier, BitMEX co-founder Arthur Hayes allowed for a possible brief move below $20,000 followed by a new bullish impulse. However in September he pointed to positive prospects for digital gold despite the Fed’s policy.
Earlier, Rick Edelman, founder of Edelman Financial Engines, forecast that the price of the first cryptocurrency would rise to $150 000 by the summer of 2025.