Main Points:
- Bitcoin’s long-term holders’ realized market cap exceeds $10 billion, indicating reduced selling pressure.
- Long-term holders (holding for over 155 days) are less likely to sell during market fluctuations.
- Current Bitcoin price is 8% below the average cost of long-term holders.
- Analysts predict potential further decline in Bitcoin price, with $50,000 as a critical support level.
Bitcoin’s long-term holders have reached a significant milestone, with their realized market cap surpassing $10 billion. This achievement highlights a crucial trend in the cryptocurrency market, where seasoned investors are holding onto their assets despite recent price declines. The reduction in selling pressure from these long-term holders could play a critical role in shaping the market’s future dynamics.
Long-Term Holders’ Realized Market Cap Surpasses $10 Billion
On August 27, 2024, CryptoQuant contributor Amr Taha reported that the realized market cap of Bitcoin held by long-term investors had exceeded $10 billion for the first time. This metric considers the price at which each Bitcoin last moved, providing insight into the behavior and sentiment of long-term holders.
This substantial figure suggests that despite Bitcoin’s recent price fluctuations, long-term holders are not engaging in panic selling. Instead, they continue to hold their assets, possibly in anticipation of future gains. The realized market cap is often compared to the overall market cap to gauge the broader market sentiment.
The Psychology of Long-Term Holders
Long-term holders, defined as those who have held Bitcoin for at least 155 days, are less likely to sell their assets during short-term market volatility. According to Taha, once Bitcoin has been held for over 155 days, the likelihood of it being sold decreases significantly. This behavior contrasts with that of short-term investors, who are more prone to react to market movements.
As Bitcoin traded below $69,000 for 29 consecutive days starting July 30, 2024, the selling pressure from long-term holders decreased. This trend was further emphasized by another CryptoQuant contributor, Axel Adler, who noted the reduction in selling pressure among this group.
Current Market Conditions and Challenges
As of the latest reports, Bitcoin is trading at approximately $59,404, a 5.47% decline over the past 24 hours. Over the last week, the price has seen a minor decrease of 0.11%. This current price is about 8% lower than the average price paid by long-term holders, which stands at $64,490.
Data from ChainExposed indicates that this price disparity may prompt long-term holders to continue holding their assets, awaiting better profit-taking opportunities. The sentiment among cryptocurrency traders suggests a potential for further price declines, which could test the resilience of these long-term holders.
Market Outlook: The Road Ahead
Prominent cryptocurrency trader Rekt Capital has warned that Bitcoin might experience a significant drop, enough to signal the end of the current bull market. Many traders view the $50,000 level as a critical support point. If Bitcoin were to breach this level, it could enter an uncertain zone, leading to increased market volatility.
However, the strong position of long-term holders could provide a stabilizing force in the market. Their reduced likelihood of selling during downturns may help cushion the impact of price declines and support Bitcoin’s recovery in the future.
A Cautious Optimism
The crossing of the $10 billion threshold in realized market cap by Bitcoin’s long-term holders is a noteworthy event. It reflects a deepening confidence among seasoned investors in the long-term value of Bitcoin, even as the market faces potential downturns. While the market remains unpredictable, the behavior of long-term holders could play a pivotal role in determining Bitcoin’s trajectory in the coming months.
