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E-money exchange rating

Short-Term Sellers Drive the Ongoing Decrease: Bitcoin (BTC) on-Chain Analysis

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Short-Term Sellers Drive the Ongoing Decrease: Bitcoin (BTC) on-Chain Analysis

BeInCrypto takes a look at Bitcoin (BTC) on-chain indicators that relate to lifespan. More specifically, the Spent Output Age Bands and HODL Waves are analyzed.

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Spent Output Age Bands

SOAB uses differently colored bands to show the age when the previous unspent transaction output (UTXO) for BTC was created. For example, the bands of 3m-6m shows current BTC transactions whose UTXOs were created between 3-6 months earlier.

Darker colors (purple) are used to represent BTC who previously moved a long time ago. In contrast, lighter colors are used to present BTC that previously moved in the short-term. 

Long-term bands usually spike in the first bounce after the market cycle is complete. This was visible on Feb 2018 (black circle), when BTC rallied from $6,000 to $12,000, after the market cycle was completed near $20,000. 

A similar but less pronounced occurrence transpired in May 2021 (gray circle), after BTC began its descent from $60,000.

Short-Term Sellers Drive the Ongoing Decrease: Bitcoin (BTC) on-Chain Analysis

Chart By Glassnode

Currently, more than 90% of the BTC that is being transacted previously moved between less than one month ago.

Therefore, it is mainly short-term sellers that are driving the ongoing downward movement.

Short-Term Sellers Drive the Ongoing Decrease: Bitcoin (BTC) on-Chain Analysis

Chart By Glassnode

HODL Waves

The HODL wave shows the ratio of the BTC that has moved in a specific time period. So, if the HODL wave band of 1-2 months has a range of 15%, it means that 15% of the total BTC supply last moved 1-2 months ago.

The main difference with SOAB is that the former measures when the previous BTC transaction occurred, while the latter shows the ratio of BTC moved in a specific time period, divided with the total supply of BTC.

In the case of the HODL wave, short-term bands spike close to a significant market cycle top. This was visible in the 2013, 2018 and 2021 market cycle tops (black circles), but less so on the Aug all-time high (white circle).

Short-Term Sellers Drive the Ongoing Decrease: Bitcoin (BTC) on-Chain Analysis

Chart By Glassnode

An interesting short-term development, is the increase of the 3m-6m band, which has occurred as a direct result of the decrease of the 1m-3m band.

What this means is that entities that purchased BTC 1-3 months earlier (black circle) are not selling, rather holding, which has caused their coins to mature into the 3m-6m band.

Between Oct 2021 – Jan 2022, the BTC price was between $43,000 and $67,000. Therefore, these entities are holding at a loss rather than selling.

Short-Term Sellers Drive the Ongoing Decrease: Bitcoin (BTC) on-Chain Analysis

Chart By Glassnode

Another fascinating development is the swelling of the 1y-2y band, as a result of the decrease from the 6m-12m band. 

Similarly to the 1-3m bands, the majority, though not all, of these entities are holding at a loss rather than selling.

Short-Term Sellers Drive the Ongoing Decrease: Bitcoin (BTC) on-Chain Analysis

Chart By Glassnode

Short-Term Sellers Drive the Ongoing Decrease: Bitcoin (BTC) on-Chain Analysis

Source

E-money exchange rating
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