Examining the source of Bitcoin’s selling pressure and its awaiting consequences

ambcrypto.com:

Bitcoin prices continue to consolidate this week, compressing into an increasingly tight area below the $40k mark. Long-term holders seem to run out of patience as accumulation trends softened in the short term despite extremely constructive long-term demand trends.

According to areport from blockchain analytics firm Glassnode, long-term holders of Bitcoin had increased their spending level. Uncertainty and macro risks were current headwinds that precipitated the increase in the sell-offs last week. Thus, affecting the LTHs as well as shaking some short-term holders out of their positions.

Post Jan 2022, the accumulation trend score fluctuated between a value of 0.2 and 0.5. This highlighted the impact of global macro uncertainty on investor sentiment.

In addition, coins older than six months accounted for 5% of total spending, a level not seen since last November. This was marginally more bearish than recent weeks. Although, it was not at levels that signified widespread fear or loss of conviction.

Source: Glassnode

The spending activity related to LTHs further indicated de-risking from the market. However, HODLing remained the predominant investing strategy.  This is because, on-chain indicators for Bitcoin, more specifically Coin Days Destroyed (CDD) traded consistently higher than a typical accumulation phase. The aggregate sum of coin-day destruction over the last 90-days remained historically low.

Source: Glassnode

The blogstated:

“During bear markets, the CDD-90 metric trades at low levels as investors slowly accumulate coins and there is an aggregate preference for HODLing.”

This suggested that accumulation and HODLing was the preferred behavior pattern at present. It would spike higher following capitulation events, as