- Long-term holders began to move their BTC holdings.
- Short sellers got liquidated, while traders turned bullish.
Bitcoin’s [BTC] price has been hovering at the $70,000 mark for quite some time. Due to the stagnancy of BTC’s price, many addresses have been contemplating selling their holdings.
Long-term holders make moves
Recent data indicated a massive trend of significant movement among long-term holders (3 to 5 years), with approximately 90,000 Bitcoin transferred over the past few weeks. These transfers predominantly involve wallets likely owned by individual users, rather than exchanges or other intermediary platforms.
Long-term holders are increasingly liquidating their holdings, it may indicate a lack of confidence in the future price appreciation of BTC or a need for liquidity for other purposes.
Additionally, a large influx of BTC onto exchanges from long-term holders could exert downward pressure on prices due to increased selling pressure.
Furthermore, the Sharpe Ratio experienced a significant increase. For context, the Sharpe Ratio is a measure of risk-adjusted returns. It can potentially impact Bitcoin negatively if it indicates an excessively high level of risk relative to returns.
A rising Sharpe Ratio might suggest that the risk associated with holding Bitcoin has increased disproportionately compared to potential gains, which could deter investors seeking a more favorable risk-return profile.
This heightened perception of risk may lead to reduced investor confidence and a subsequent decrease in demand for Bitcoin, ultimately putting downward pressure on its price.
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Author: Himalay Patel
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