The number of bitcoin held by short-term holders has been declining since late May, indicating a weakening in demand, according to an analyst.
“The fact that short-term holders are not accumulating can mean demand for bitcoin remains weak,” CryptoQuant Head of Research Julio Moreno told The Block. Moreno added that bitcoin long-term holders are accumulating in the face of this short-term holder capitulation. However, Moreno said that the opposite of this dynamic could play out if demand for bitcoin grows again, “leading to short-term holders buying from long-term holders.”
The CryptoQuant analyst further highlighted charts that showed a notable shift in bitcoin ownership dynamics. They revealed that short-term holders—those who have held their bitcoin for 155 days or less—have significantly reduced their positions, particularly throughout July and August.
CryptoQuant contributor IT Tech said the dynamic could lead to medium-term price appreciation and market stabilization. Increased accumulation by long-term holders could lead to price stabilization and position the market for a potential rebound, while short-term holder sell-offs may create short-term downward pressure on bitcoin prices. The data shows a clear capital flow from weak hands (short-term holders) to strong hands (long-term holders), signaling market stability,” they said.
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Charts show a significant amount of short-term holder selling in the past two weeks. Image: CryptoQuant.