Crypto Market Sees Diverging Strategies Between Short and Long-Term Holders: Report
The famous analytical service CryptoQuant has provided some interesting information about the actions of investors in the crypto market in the last two weeks. In a recent report, the firm highlighted that there is a clear dichotomy between short-term and long-term Bitcoin holders. Now that the short-term investors are leaving due to market volatility, the long-term holders are stocking up on BTC proving their faith in the future of the cryptocurrency.
Data shows a dramatic reduction in the net positions of short term holders (STH) in the past two weeks. Most of these investors who are fast in making decisions depending on the market trends have decided to dispose off their Bitcoin due to the unstable prices. Looking at the net position chart it is possible to see a red zone which means that short term investors are leaving the market, either taking profits or closing their positions.
The analysis indicates that this wave of sell-offs could be related to the higher levels of uncertainty in the crypto market. Due to the increasing volatility and even more frequent sharp price changes, short-term investors seem to be decreasing their risks. This trend shows that these investors are somewhat cautious, since they try to avoid possible losses in such an uncertain environment.
Crypto Market Divergence Grows
Even as short-term investors are scaling back, long-term holders (LTH) are showing more and more confidence in the cryptocurrency. The net position of LTH has been increasing during this period suggesting that these investors are buying more Bitcoin. This accumulation is captured in the net position charts green zone, which is considered as a positive indicator for the market.
The long term investors who do not focus on the price fluctuation are using this opportunity to buy and wait for the price appreciation in the future. CryptoQuants analysis points out that such behavior could bring a much needed balance to the market. Since more bitcoins are being transferred to the long-term holders, the chances of massive selloff are reduced, which may open up the possibility for a market rally.
The difference between the actions of short-term and long-term investors is more informative about the state of the crypto market. Short-term sales may persist to exert more pressure on the prices in the near future while long-term investors may begin buying and build the market.
Data from CryptoQuant shows that the long-term holders of Bitcoin are accumulating while the short-term invaders are being liquidated, this is a positive sign because while volatility may still be an issue, those who hold their Bitcoin for the longer term are building the cornerstones for future gains. This trend should be watched closely by investors as it could have implications on the market in the next few weeks.
Read more: https://www.tronweekly.com/crypto-market-sees-diverging-strategies-between/
Text source: TronWeekly
