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Bitcoin’s price has risen by almost 9% in the last fortnight, with the cryptocurrency currently priced at $61k at press time. With the stock still very similar to its previous ATH, many anticipate the world’s largest cryptocurrency to see more price exploration. However, this begs the question: Is it possible that BTC’s existing buyers will cave and become sellers?
Though BTC has experienced considerable bullish momentum in recent months, the cryptocurrency has also experienced market corrections following previously defined ATHs. BTC continues to have the support of loyal hodlers, but this hasn’t made the market resilient to short-term price corrections.
Interestingly, Glassnode data revealed that hodled coins are now maturing to achieve long-term holder status. To put this in perspective, it’s also worth looking at BTC’s liquid supply transition metric.
The Liquid location shift metric displays the rate at which coins transition from liquid to illiquid. This measure highlights in red coins that have been hoarded and are unlikely to be traded. However, after a certain threshold, the pattern reverses and coins are once again sold [shown in green].
According to the measure, the last time Bitcoin went from illiquid to liquid was in December, when the 2017 ATH was broken and several traders believed Bitcoin had hit its height. The upcoming months, as well as increased confidence in the coin’s long-term potential, flipped this phenomenon, resulting in increased hodling. Will a pattern turnaround occur again now that BTC has reached a new high?
Changes in Bitcoin HODLer Position will also add insight and clarification to the actual business situation in which BTC finds itself. The HODLer Position Change metric is currently trending upward, and with the large volumes of BTC purchased by institutional investors in 2021 [assuming they continue to own the digital asset], this trajectory is unlikely to change.
According to the data, there has been a significant decrease in hodler spending beginning in the second half of January 2021.
Furthermore, Glassnode’s Coin Years Lost (CYD), which records the number of coin-days destroyed over the last 365 days, serves as a cyclical proxy for determining whether there has been spending or HODLing over the past year.
Interestingly, a high or increasing CYD meant that more old coins were expended in the previous year, and the CYD is now trending higher. However, this is just getting closer to the values seen in 2013, when Bitcoin saw a significant price correction, and it is also a long way from the 2017 high.
If Bitcoin attempts to break above its current ATH and approaches the $65k mark, investors can only be concerned about a price reversal if hodler spending increases dramatically. Since this runs counter to the recent trend, it is unlikely that many of the current market’s consumers will convert to sellers.
As a result, traders are largely secure even as Bitcoin approaches the $61k-$65k price range. If there is a whale-induced sell-off, this would be the case.