Are Bitcoin HODLers Helping Pump Prices?
On-chain analysis now links HODLers' activities to steadying and firmer prices.
According to GlassNode, long-term Bitcoin holders, also known as HODLers, have been, in recent weeks, exiting their multi-year positions and immediately buying, steadying, and even pumping prices higher.
At present, there is what an on-chain analyst describes as a local bottom of Bitcoin supply pushing higher than the average dormant supply age. In turn, their activities--and appetite for circulating Bitcoin--cause a supply squeeze where the race to accumulate Bitcoin causes the demand to rise, therefore, offering support for prices.
Another interpretation points to a possibility of waning upside pressure as more coins are locked in cold storage. As per Bitcoin's short history, there are clear similarities between what's presently forming with price action and Bitcoin supply characteristics of late 2017 and late April 2021.
Based on this, traders should nonetheless remain cautious and employ risk management strategies in preparation for any eventuality. Suppose Bitcoin prices surge higher as more HODLers enter, the better for buyers and the more opportunities there would be for traders to explore. On the reverse side, deeper losses below $42k—January 20212 highs—and $40k—a crucial psychological round number would confirm selling pressure of early September.
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