Bitcoin (BTC) disappointed short-term investors who bought BTC during the recent bull run as it dropped below $30,000. This unpredictability in Bitcoin’s price has prompted some investors to adopt a long-term approach with the largest cryptocurrency. Data provided by on-chain data platform Glassnode shows that the total amount of Bitcoin held by long-term investors (LTH) has reached record levels.
LTHs Set Records with Their Buying While STHs Sell
Glassnode, the on-chain data platform, reported that LTHs’ holdings of BTC have reached an all-time high of 14.5 million. Data analyst Gustavo Faria noted that the spent output profit ratio (SOPR) of short-term Bitcoin investors (STHs) on the blockchain is very close to 1. An SOPR below 1 indicates that sellers are at a loss, while a higher SOPR indicates profit. It was expected that SOPR would act as a support area during Bitcoin’s upward movement, but it did not fulfill this role. A decrease towards 1 indicates that the majority of STHs have made very little or no progress.
On the other hand, long-term investors have higher spent output profit ratios compared to STHs. When this statistic is extremely high, it is interpreted as Bitcoin being close to the market top. However, Bitcoin with a relatively low SOPR ratio of 1.38 can be considered closer to the bottom rather than the top.
They Are the Strong Hands of the Market
LTHs are often referred to as the “strong hands” of the market because they tend to hold their BTC for a long time regardless of market conditions. The Bitcoin supply held by LTHs was steadily increasing during the early months of the rally, indicating a clear entry into this category. However, the LTH indicator started to decline in late February and reached its lowest level in March, coinciding with a significant drop in Bitcoin’s price. This suggests that some of the sales made by LTHs may have contributed to the price decline.
Despite the recent drop in Bitcoin’s price, some investors continue to hold onto their assets, demonstrating their optimism regarding the long-term potential of Bitcoin. Data belonging to LTHs shows that this investor group remains strong despite the downward trend in the market.
