Crypto

Bitcoin LTH continues to sell at a loss despite…

Bitcoin experienced significant fluctuations in 2022 as it fell heavily during this bear market. One aspect that has recently gained prominence is the long-term relationship of holders. Selling pressure on LTH then abated as prices rebounded above their average underlying value of $22.6k throughout July.

However, despite the easing of financial restrictions, LTH continues to sell at net losses ranging from 11% to 61% on average. Could this selling pressure be fueling unwarranted FUD in market sentiment as it tries to rally?

Gather a crowd

Despite the uncertainty of the macroeconomic situation, since the beginning of July, the cryptocurrency market has been gradually recovering. Bitcoin itself saw a steady rise during this time as it briefly touched the $24,000 level. However, fears are emerging after the latest bout of pressure from a cohort of long-term holders, according to Glassnode.

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Currently, long-term Bitcoin holders own over 13.337 million BTC, or 79.85% of the total in circulation. However, they have distributed about 222,000 BTC since the beginning of May, which is about 1.6% of their unprecedented holdings.

The underlying cost of LTH at the time of publication was $22,600, which means that on average, long-term assets make a 4% return. This is because BTC is trading just below $23.2,000 at the time of writing. This meant that at the time of publication, MVRV represented profitability for these long-term holders.

There has also been a significant shift in market sentiment among long-term holders over the past three weeks. Their cumulative behavior has changed from accumulating at a rate of 79 BTC per month to distributing up to 47,000 BTC per month.

As noted in the report,

“Notably, this group took the opportunity to raise the price and spent 41,000 BTC, or 0.3% of their supply, in the last 21 days. (Note that net spending is defined as accumulation plus HODLing minus distribution).

“Bitcoin on the Moon”

Sentiment also pointed to an interesting development of social media among bitcoin enthusiasts. Bitcoiners repeated their sarcastic “moon” and “lambo” chants on social media during this year’s crypto slide.

However, images of these words are often a sign of a bullish rally in BTC.

Conclusion

Institutional sales have also been in the news lately. The most famous of these was Tesla, which recently sold over 75% of its BTC holdings.

As these indicators seem to be fueling FUD sentiment in the market, BTC continues to hold its support level. Bitcoin has remained relatively tight over the past 24 hours but has dropped over 2.8% in a week.

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