Accumulation of Bitcoin by Long-Term Holders Reaches Fastest Pace Since October 2021
Recent price downturns in the cryptocurrency market have been leveraged by long-term bitcoin holders as an opportunity to capitalize. This is particularly observed in the context of bitcoin’s decoupling from the tech-heavy Nasdaq index.
Glassnode, a blockchain analytics firm, reports that long-term holders are actively accumulating Bitcoin at the fastest rate since October 2021. The firm tracks the net amount of BTC deposited or withdrawn from exchange wallets holding the coins for over six months through its long-term holder net position change indicator. This suggests that investors view the recent dip in Bitcoin’s value as a temporary downturn in a bullish market and are taking advantage of the opportunity to acquire more Bitcoins. In other words, Bitcoin accumulation by long-term holders has been on the rise.
Bitcoin and Nasdaq exhibit divergence, raising concerns among investors
Q9 Capital, a crypto investment platform, reported via email that long-term Bitcoin holders are acquiring more of the cryptocurrency. This suggests they see the current period of price stagnation as a chance to increase their holdings. Glassnode identifies these holders as wallets that have held their Bitcoin for at least 155 days without divesting or transferring their holdings.
Bitcoin’s value surged to an unprecedented price point of $31,000 on April 14, the highest since June 2022.
. Subsequently, the value of the aforementioned cryptocurrency has experienced a decline of 12%, plummeting to a price of $27,500. Conversely, Nasdaq has undergone an increase of over 2% since the middle of April.
Decoupling of Bitcoin from Nasdaq and S&P 500 Raises Concerns Among Investors
During the mentioned time period, the Nasdaq-to-S&P 500 ratio, which has historically exhibited a strong correlation with Bitcoin, has risen by over 2%. This divergence has raised concerns among Bitcoin advocates as it departs from the expected correlation between Bitcoin and technology stocks.
Markus Thielen, Head of Research and Strategy at Matrixport, stated that the decoupling could cause a significant divergence between the two entities. Equity investors believe that there may be a regulatory shift in the US, leading to increased scrutiny of technology stocks. Such a shift may serve as a possible explanation for the observed divergence.
The prediction of an impending economic recession was thwarted as tech stocks persevered in their impressive momentum and outperformed expectations. It is necessary to provide coverage for the aforementioned shorts. Regrettably, Bitcoin lacks substantial outstanding short positions that may be subject to a squeeze, thereby resulting in a potential divergence between the performance of Nasdaq and that of Bitcoin.
Bitcoin holders with a long-term perspective maintain a positive outlook on the cryptocurrency’s future, as evidenced by the current trend of net accumulation. They are confident that the price of bitcoin will rise and remain on an upward trajectory for a prolonged period.