Bitcoin has seen broad volatility in 2022 as it fell sharply during the bear market. An important aspect of late is the sentiment of long-term holders. Selling pressure on LTH eased as prices rose above its average cost base – $226,000 throughout July.
However, despite lower financial constraints, LTH continues to sell at an average net loss of 11% to 61%. Could this selling pressure fuel unfounded FUD in market sentiment as it tries to recover?
Despite the uncertain macro environment, the crypto market has been recovering gradually since early July. Bitcoin itself has grown steadily during this period as it briefly touched the $24,000 level.However, concerns are emerging after the latest selling pressure from the long-term holder group as report Provided by Glassnode.
Currently, long-term Bitcoin holders own more than 13.337 million BTC, accounting for 79.85% of the total circulation. However, since the beginning of May, they have distributed around 222k BTC – equivalent to 1.6% of their all-time high holdings.
At press time, the LTH cost basis is trading at $22,600, implying an average profit of 4% on long-term holdings. This is because BTC is trading just under $23.2k at the time of writing. This means that the MVRV ratio at press time represents the profitability of these long-term holders.
Market sentiment among long-term holders has also shifted significantly over the past three weeks. Their aggregate behavior has gone from accumulating at a rate of 79 BTC/month to a distribution of up to 47k BTC/month.
As noted in the report,
“It’s worth noting that this group took advantage of the price increase and spent 41k BTC or 0.3% of its supply in the past 21 days. (Note that net spending is defined as accumulation plus holding minus distribute).”
mood An interesting development on social media for Bitcoin enthusiasts was also pointed out. In this year’s cryptocurrency slideshow, Bitcoiners took to social media to respond to their sarcastic chants of “Moon” and “Rambo.”
However, spikes in these words are usually a sign of a bullish BTC rally.
Recent news has also pointed to institutional selling. Most notably, Tesla recently sold over 75% of its BTC holdings.
Although these indicators are designed to drive FUD sentiment in the market, BTC continues to hold its support level. Bitcoin has remained relatively unchanged over the past 24 hours but is down more than 2.8% for the week.