Here’s what on-chain data has to say about which part of the Bitcoin market has been involved in trading at recent highs.
90+ Day Bitcoin Investors Have Shown Activity Recently
As noted by YouTuber denome in X’s post, only one part of the Bitcoin market is still engaged in profit-taking. The data shared by the user comes from the on-chain analytics company Santiment. More specifically, the chart is a Longitudinal Cycle indicator.
Dormant Circulation tracks the total number of tokens circulated on the blockchain after being dormant for at least a given length of time.
Below is a chart of the metric, which shows the trend in its value for three different periods over the past few months:
The value of the metric appears to have been high for the 90+ days cohort in recent days | Source: @denomeme on X
In the graph, the three versions of the Audio Cycle listed are: 90 days, 365 days, 3 years. Note that these are the starting points of the times that the metric is tracked; 90 days, for example, measures coin transactions that were held more than 90 days before the move.
From the chart, it is clear that Dormant Circulation has risen to significant levels in 90+ days and 365+ days as the cryptocurrency rally took place last month.
At one point, the difference between the two spikes was not even that much, so a lot of the transactions that were counted in the 90+ day version were actually coins older than 365 days. Therefore, it seems that a group of veterans of the Bitcoin market, called long-term holders (LTHs), have been busy selling.
The 90-day Dormant Circulation remained at significant levels this month as the stock’s bullish momentum continued with its price testing above the $100,000 level.
Unlike last month, however, the 365-day version of the index hasn’t registered any spikes yet, meaning that coins with ages between 90 days and 365 days are the ones being traded. This range is half made up of senior short-term holders (STHs) and half of junior LTHs.
Considering that the vast LTH collection did not participate in any sales, however, it is possible that most of the transactions are actually STH coins.
Based on the trend seen in the last month, it seems that some of the HODLers were quick to take their profits early, but now this group believes that Bitcoin still has the potential to run above the recent high, so its members are involved in selling.
STHs are known to represent the volatile side of the market that sells easily, so it’s no surprise that they are still taking profits amid the $100,000+ hype run.
BTC price
At the time of writing, Bitcoin is trading around $104,200, up more than 6% over the past week.
Looks like the price of the coin has been on the way up over the last few days | Source: BTCUSDT on TradingView
Featured image from Dall-E, Santiment.net, chart from TradingView.com
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