While it’s true that the crash can be partly blamed on panic selling, most long-term holders aren’t up for flogging their coins, according to blockchain analysis company Glassnode, whose latest figures show that 73.17% of all Bitcoin “entities” are still in the black.
An “entity” is defined by Glassnode as a cluster of addresses that are controlled by the same network entity. In a report released this week, the firm noted that “The Bitcoin market has just experienced the largest deleveraging event since the March 2020 sell-off”—but when it was all said and done, the coin holders at a loss are “largely buyers from the last 3-4 months.”
In other words, even though Bitcoin is currently trading at almost half its all-time high price of around $64,000, most investors got in well before current levels of around $37,000.
“During this capitulation sell-off, however, the spending of 1y-3y old coins was actually significantly less and declining as a proportion of total activity,” the report added. “This suggests that old hands did not panic sell nor rush for the exits.”
Data shared with Decrypt also showed that during the sell-off, the amount of big whales—wallets holding 10,000 or more Bitcoin ($382 million-worth of the cryptocurrency)—also increased from 85 to 90, meaning big time investors saw this as an opportunity to snap up more Bitcoin.
Still, there’s no denying that last week was a tough one for Bitcoin. A combination of factors ranging from Elon Musk tweets to China regulatory news helped send the largest cryptocurrency by market cap crashing. Last week, it touched as low as $30,000 per coin—52% lower than it’s all-time high reached in April.
All in all, however, the data appears to indicate that it was primarily people who are still very new to crypto investing that were shaken out of the market. “There is no question that a large portion of the recent spending activity was driven by short term holders, those owning coins purchased within the last 6 months,” Glassnode said.
Maybe there’s something to be said for those “diamond hands” after all.