Bitcoin: Short-term holders play it safe as positive sentiment wanes

  • BTC long-term holders have increased accumulation, while short-term holders have gradually dropped their bags over the past year.
  • The Bollinger Bands of BTC and The stochastic oscillator hinted at a price rebound.

While bitcoin [BTC] Long-term (LTH) holders are stepping up the accumulation amid declining positive sentiment, major short-term (STH) holders have taken a more cautious approach.

According to data from IntoTheBlock, the amount of BTC held by this cohort of investors over a 12-month period was lower than the amount they held during the 2021 bull market.

Historically, increases in the price of the main coin have been accompanied by an increase in the number of its STHs. However, the recent price surge above $32,000 has not led to an increase in such investors. “Instead, the long-term growth of holders continues,” IntoTheBlock noted.

The on-chain data provider further stated that this stands in contrast to 2019, where BTC’s return to $11,000 led to a significant increase in short-term holders.

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BTC could have short-term problems

At press time, the main coin was trading at $29,363.01, according to data from CoinMarketCap. At press time, BTC’s weighted sentiment was -0.421. This metric has lingered below the zero line since early June. Bad sentiment has caused the price of the coin to hover in the narrow range of $29,000 and $32,000 since April.

As more traders exit their trade positions to seek safety, BTC accumulation has declined on the D1 chart. At press time, key momentum indicators sat below their respective midlines.

When these indicators show a value below 50, it suggests that the price of BTC continues to weaken as selling pressure outweighs buying pressure. It also implies that the overall sentiment is bearish and that the price could be on a downtrend for some time to come as it struggles to regain positive momentum.

At press time, the relative strength index (RSI) of BTC was 45.43. Its Money Flow Index (MFI) was buried deep in oversold territory at 29.18.

Signaling an increasing outflow of liquidity from the Bitcoin market, its Chaikin Money Flow (CMF) returned a negative value of -0.08 at the time of writing.

Source: BTC/USD, TradingView

But here’s the catch

While the above indicators suggest that BTC selling has exceeded accumulation over the past few weeks, a closer look at the Bollinger Bands indicators and the coin’s Stochastic Oscillator showed that it was oversold. and that a price recovery could be on the horizon.

Bollinger Bands measure an asset’s price volatility and potential overbought or oversold conditions. Similarly, the Stochastic Oscillator indicator generates signals based on overbought and oversold conditions by comparing the closing price of an asset to its price range over a specific time period.

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At press time, BTC’s price was resting on the lower band of its Bollinger Bands indicator. This suggested that the coin was oversold at its current price and may experience an upward price correction.

Regarding the stochastic oscillator, the K line (blue) was positioned above the D line (orange) in the oversold zone (below 20). This also gave credence to the position that the price of the coin might rebound.

Source: BTC/USD, TradingView

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