Blockchain information provider Glassnode has published data on the selling behavior of long-term Bitcoin (LTH) holders. These investors hold BTC for more than 6 months and are considered the “smart money” of the ecosystem, often buying when prices fall and selling when the market rises. However, when panic and fear hit the market, LTH capitulated and sold off, as can be seen from Glassnode’s on-chain metrics.
Kyexchange amount LTH Bitcoin exchange | Source: glass node
These indicators show that when LTH sells bitcoin to exchanges, the index spikes sharply in moments of fear and capitulation. Past events that have contributed to this include the failure of LUNA and FTX, the Chinese ban in May 2021, and now the virtual capitulation due to the collapse of Silvergate and Silicon Valley Bank.
Kyexchange amount trial loss luxury comminicate | Source: glass node
Recent data shows that LTH capitulated at a rate similar to the FTX crash, with roughly 10,000 BTC being sent to exchanges and all sold at a loss. While capitulation (especially LTH) may mark the bottom of the Bitcoin cycle, the consequences and contagion for the banking and financial sector cannot be fully assessed and are likely to change. is a short-term bearish bias for Bitcoin price action.
In order to understand the current state of the BTC market, the sales model of LTH is an important factor to consider. While these investors are often considered the smart money in the ecosystem, their selling patterns can also cause market volatility. As the aftermath of recent banking and financial problems continue to unfold, it will be interesting to see how this affects price action and the behavior of long-term holders.
#bitcoin Long-term holders sell off in response to fallout from financials @azcoinnews https://t.co/TnGdBXDJg7
— Kyptos (@azcoinnews) March 12, 2023
Bitcoin and ETH funding rates drop to multi-month lows, reveals positions long cheap
According to data from CryptoQuant, BTC’s funding rate hit a 4-month low, which means long positions in BTC futures contracts cost.
fundingeat belong bitcoin | Source: encryption quantization
Likewise, ETH’s funding rate hit a six-month low, which means it’s cheaper to hold long positions in ETH futures.
funds reat belong Ethereum | Source: encryption quantization
A funding rate is the fee a trader pays to hold a long position in a futures contract. When funding rates are high, it can be costly for traders to hold long positions for long periods of time, which can put downward pressure on asset prices. Conversely, when funding rates are low, traders can take long positions at lower prices, helping to support asset prices. This could weaken the market further for a while.
- Bitcoin Fear and Greed Index falls to 2-month low
- SVB Forced Shutdown Marks Second Largest Bank Failure in U.S. History, Bitcoin Slightly Up
- SVB collapse leaves VCs in the lurch of more than $6 billion
according to Kyptos