Bitcoin's Price Drops 6% After Short-Term Holders Halt Accumulation
1min read Bitcoin recently experienced a brief surge, approaching the $88,000 mark due to renewed bullish sentiment across the broader cryptocurrency market. However, this momentum quickly dissipated, and the price fell below $83,000. This sudden increase can be attributed to a recent slowdown in the accumulation of Bitcoin by short-term holders.
Advanced investment and on-chain data platform reported that short-term holders have ceased accumulating Bitcoin as the asset's price continues to fluctuate. This slowdown in buying activity raises concerns about weakening demand for BTC. The halt in accumulation signals declining confidence in Bitcoin's short-term prospects, which could lead to increased selling pressure. With more selling from these investors, BTC's price recovery is likely to be delayed.
The platform revealed this trend through an analysis of the Bitcoin Supply Age Bands, a key metric that categorizes BTC supply by age. Data from this metric shows that the supply of short-term holders, defined as those holding for up to 3 months, has drastically declined. This suggests a weakening appetite for accumulation or buying activity among these investors. Monitoring this short-term investor behavior daily is crucial, as a persistent decline is not encouraging.
Ask Aime: What factors led to Bitcoin's recent price surge and subsequent decline?
Historically, periods of excitement and public attention have been associated with high values of this indicator. Conversely, price corrections have been linked to low levels of the metric. When the supply increases, BTC’s price tends to rise; when it decreases, the price often follows, raising the possibility of a further decline in the upcoming weeks. However, this is not always the case. In the past, Bitcoin has hit new highs even during periods of declining STH Supply. For instance, in 2021, the STH Supply began to fall in April, but by October and November, BTC reached new all-time highs. A similar trend was observed in the 2013 cycle, where the supply rebounded within a few months, resulting in a move to new highs.
With the supply dropping again, this implies that Bitcoin may still hit new highs in 2025 despite the current lack of interest from short-term holders. Thus, the development could cause a surge to new all-time highs for BTC in the next 6 months if a comparable result emerges.
