- The rally in BTC’s price has attracted many new short-term holders.
- Their profit-taking habit may result in a price correction.
The recent hike in Bitcoin’s [BTC] value has led to an uptick in the number of short-term investors holding the leading coin, pseudonymous CryptoQuant analyst MAC_D noted in a new report.
The analyst assessed the coin’s Unspent Transaction Output (UTXO) for the different age bands that hold the coin.
They found that there has been a surge in the percentage of investors that have held BTC between a day and a week.
Per CryptoQuant’s data, this has risen by 49% since 24th January.
According to MAC_D, this increase mirrored similar trends observed in October 2020, which marked the beginning of the last major bull run in the cryptocurrency market.
What you need to look out for
It is trite to note that investors who BTC between a day and a week are mostly short-term holders (STHs), and their recent influx into the market poses certain risks.
This is because they are typically more price-sensitive than long-term holders (LTHs), as they have their coins easily accessible and ready to distribute once BTC’s price falls below their cost basis.
According to MAC_D, this continued influx will lead to,
“Inflows of new capital and rising prices, and overheating will be the default for futures and on-chain data going forward.”
An assessment of BTC’s Chaikin Money Flow (CMF) confirmed the steady liquidity inflow into the
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Author: Abiodun Oladokun
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