Why are traders expecting a new turn in bitcoin growth?

Investors who bought bitcoin during the latest growth cycle are in no rush to sell coins for $40,000, data demonstrates. This may indicate an upcoming new round of growth in the cryptocurrency market.

According to analyst firm Glassnode, for the first time since October 2020, Bitcoin holders started buying more cryptocurrency rather than selling it. In the latest issue of The Week On-Chain newsletter, Glassnode analysts point out that investors who bought bitcoin in the early months of the bull market prefer not to sell the coins, even though selling them would bring them 100% profit. They come to this conclusion by analyzing the Hodl Waves indicator, a metric that provides a macro view of both the age distribution of the existing supply, and of changes to this distribution as coins mature and are spent. It takes into account the price at which the coin was sold and bought the last time. According to the indicator, BTC’s offer to sell is aging as many investors choose to keep coins in wallets and not sell them.

“Accumulation and HODLing behaviour will result in coin maturation (young to old) as an increased proportion of coins move from younger age bands (warm colours) into older age bands (cool colours),” Glassnode indicator overview explains.

The graph shows that the share of coins purchased in the period from one to 12 months is increasing. The growth in the share of coins purchased in the period from 3 to 6 months ago stands out especially.

“What is common in all Bitcoin cycles is that LTHs spend a larger majority of their coins into the strength of bull rallies, and slow their spending on pull-backs as conviction returns.”

Glassnode analysts note that the number of bitcoins in long-term cryptocurrency holders continues to increase, and newbie investors who hold cryptocurrency for less than a month are selling bitcoins.

Via: 2Coinfox.info

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