Summary: After emerging as a standout macroeconomic asset in 2020, Bitcoin appears to be transitioning from a "gradual" to a "sudden" phase. This week, we analyze the on-chain behavior of short-term traders and long-term holders (LTHs) amid market volatility.
Bitcoin's Historic Week
Bitcoin entered uncharted territory as El Salvador voted to adopt it as legal tender, marking a watershed moment for the industry. Volcanic geothermal energy may soon power Bitcoin mining in the region.
Despite opening weakly—dropping to a weekly low of $31,185—the market rebounded sharply post-vote, reaching $39,269.
Profitable Supply Dynamics
Bitcoin’s volatility attracts traders, while its fundamentals appeal to long-term investors. Tracking profitable supply changes reveals:
- 1.985M BTC (10.5% of circulating supply) has a cost basis between $31K–$39K.
Three groups hold these coins:
- January 2021 HODLers (now crossing the 155-day LTH threshold).
- New accumulators (buying recent dips).
- Short-term traders (actively monetizing price swings).
👉 Why Bitcoin’s accumulation phase matters
Trader Profit-Taking & Short Squeezes
STH data highlights:
- 37% of recently profitable supply (737K BTC) stems from short-term trades.
- 63% belongs to LTHs holding since January.
- Futures open interest remains subdued, with neutral funding rates suggesting trader uncertainty.
Key pattern: Negative funding rates preceded price rebounds, triggering $86M in short liquidations.
LTHs Stay the Course
- 40K+ BTC/month matures past the 155-day threshold—far exceeding May’s sell-off volume (~16K BTC).
- LTH profit multiples peaked at 7.5x in April; now averaging 3.2x, indicating disciplined profit-taking.
- Binary CDD metrics confirm LTHs aren’t panic-selling, signaling accumulation.
👉 How long-term holders shape Bitcoin cycles
FAQ
Q: What’s driving Bitcoin’s current price action?
A: Macro adoption (e.g., El Salvador) and trader positioning—short squeezes amplify rebounds.
Q: Are LTHs selling during this consolidation?
A: No. On-chain data shows record-low spending activity by long-term holders.
Q: Could miners pressure prices?
A: Unlikely. Mining revenue remains stable, and no major capitulation events are detected.
Sources: Glassnode, CryptoLive Original Analysis