Long-Term Hodlers Are Accumulating More Bitcoin Each Day, Bullish for BTC
While the crypto market has been pronounced dead many times in its history, it wasn’t until the hit it took in mid-March that the crypto community began to question the future of the industry. More than $70 billion has been wiped from the market in a matter of days, shaking the confidence of most newbie investors who took heavy losses when Bitcoin’s price dropped to below $4,000.
However, not everyone was scared by the massive crash in the market caused by the coronavirus pandemic.
Long-term hodlers seem to have taken up the chance to accumulate even more Bitcoin during the market downturn, which could, despite current volatility, present an incredibly bullish case for the world’s largest cryptocurrency.
The latest data from cryptocurrency research and analytics company Glassnode showed that dipping prices were seen as a massive investment opportunity by some of the largest hodlers on the market.
According to the company’s report, April saw a significant increase in the value of long Bitcoin positions. This was calculated through a metric called the hodler net position change, which tracks the BTC flow of long-term investors in the market. First calculated by Bitcoin alpha fund Adamant Capital, the metric quickly began making rounds on social media, as traders and investors seemed excited about the good news for Bitcoin.
Glassnode shared the metric on their Twitter account, saying that the hodler net position change has been growing daily since the end of March and has hit yearly highs as April was coming to an end.
This, according to the company, shows that long-term investors are increasing their positions and accumulating more Bitcoin each day.
Graph showing the net position change for Bitcoin hodlers from May 2019 to April 2020
The data showed that hodlers are adding well over 75,000 BTC to their positions each day. However, it’s worth noting that Glassnode’s data doesn’t exclude wallets owned by large exchanges, which means that a portion of the 75,000 BTC added each day might have gone to them.
This trend correlates to the huge drop in Bitcoin balances cryptocurrency exchanges have seen in the past month. The drop, which has been getting steeper and steeper as April went by, began in mid-March when the overall Bitcoin balance on exchanges began dropping from around 2.35 million BTC.
Graph showing the Bitcoin balances for cryptocurrency exchanges from Oct. 14, 2020 to Apr. 13, 2020
As 8BTC reported earlier this month, Glassnode believes that the drop illustrates a shift away from day-trading for many cryptocurrency investors. As the amount of bitcoins withdrawn from exchanges keeps rising, it could indicate that more investors are turning to long-term holding strategies.
With the Bitcoin block reward halving set to happen on May 12, these trends present a hugely bullish trend for the cryptocurrency. It shows that not only people are expecting Bitcoin to grow immediately after the halving, but are anticipating a huge increase in value in the long-term and are making sure they increase their holding while the price dip lasts.