Data shows old Bitcoin holders aren’t selling even as newcomers get hit by volatility

Last week saw global markets react to news of potential tax law amendments in the United States. As CryptoSlate reported, sources close to the current Biden administration said policymakers were planning to increase taxes for wealthy investors to as much as 43.50% for gains above $1 million.

The news resulted in a sell-off that saw the flagship cryptocurrency’s market value drop by 15.40%, shedding 8,570 points. Bitcoin went from trading at a high of $55,500 on April 22 to hit a low of $46,940 three days later. 

The sudden downswing generated nearly $1.30 billion in liquidations worth of long BTC positions across the board. 

Given the magnitude of the losses, the “Crypto Fear and Greed Index,” a collective metric that measures current sentiments on the cryptocurrency market, swiftly swung from “Extreme Greed” (79 points) to “Fear” (27).

Crypto Fear and Greed Index
Crypto Fear and Greed Index

According to on-chain analytics firm Glassnode, new Bitcoin holders have been the most fearful while older holders remain calm.

The number of BTC with less than a week old was quickly spent over the past few days, suggesting “newer market entrants were shaken out during this correction.” Meanwhile, the number of coins older than six months did not see a significant increase in spending.

The on-chain data provider maintains that such behavior by market participants was seen in previous consolidation periods, which essentially led to higher highs.

“Previous instances of similar spending behavior was observed during the December 2020 consolidation, just before breaking to new ATHs, and during the first bull market correction in January,” said Glassnode. 

Bitcoin Spent Output by Glassnode
Bitcoin Spent Output by Glassnode

Bitcoin hits a brick wall

Data from on-chain analytics firm IntoTheBlock’s In/Out of the Money Around Price (IOMAP) model shows that Bitcoin sits underneath a massive supply barrier. Roughly 3.90 million addresses had previously purchased more than 1.50 million BTC between $54,700 and $58,700. 

As such, further price appreciation may prove challenging.

In/Out of the Money Around Price by IntoTheBlock
In/Out of the Money Around Price by IntoTheBlock

Only a decisive daily candlestick close above the $54,700-$58,700 resistance wall could allow Bitcoin to resume its uptrend and reach new all-time highs. But failing to break this hurdle might lead to a rejection back to $50,000. 

The post Data shows old Bitcoin holders aren’t selling even as newcomers get hit by volatility appeared first on CryptoSlate.


Share on facebook
Share on twitter
Share on pinterest
Share on linkedin
On Key

Related Posts

Promoting Bitcoin Could Damage The Reputation Of Banks, ECB Warns

The European Central Bank has cautioned banks against promoting Bitcoin investments, arguing that the cryptocurrency’s apparent calm will likely pan out, plunging prices lower. In a Wednesday blog dubbed “Bitcoin’s Last Stand” by Ulrich Bindseil and Jürgen Schaaf, the director general and advisor of the ECB of the institution noted that banks risked incurring long-term

Bitcoin, Ether Not Securities Because They Have No Issuer: Belgium Regulator

The regulator of the European country said cryptocurrencies issued by computer codes are not considered securities. Brussels is neutral to blockchain technology, a stark contrast to the US. Brussels’ financial authority has clarified that cryptocurrencies without an issuer cannot be classified as securities. The Financial Services and Markets Authority (FSMA) announced that digital assets issued

Over 10K Bitcoin (BTC) Moved To Crypto Exchange, Are Miners Selling?

Bitcoin price rallied after Fed Chair Jerome Powell hinted at slower rate hikes in December and upcoming sessions. The BTC price hit a high of $17,194 with an over 200% jump in trading volume. On-chain data indicates that miners facing financial issues are indeed selling their Bitcoin holdings, with Bitcoin hashrate decreasing continuously due to