Two Groups of bitcoin Investors sell on the rise as U.S. inflation lifts prices to nearly $65,000
Bitcoin prices have risen to nearly $65,000 following softer-than-expected U.S. inflation data. However, both long-term and short-term investors are selling into the rally, signaling potential market exhaustion.
Why it matters
Understanding investor behavior during inflationary periods provides insight into the volatility and maturity of the cryptocurrency market.
The first are long-term holders, which Glassnode defines as addresses/wallets that tend to hold for at least five months. Long-term holders, who bought near highs last year, are capitulating, or using the bounce to sell their coins at a loss rather than holding through deeper drawdowns. This signifies a lack of confidence in the sustainability of the latest BTC price rise.
Suggesting the same are short-term holders, who scooped up coins near the recent lows. They are currently realizing profits at a pace exceeding $4 million per day in a selling wave reminiscent of what was seen in May, when BTC briefly rose to its 200-day average above $82,000.
The result? Simultaneous selling from both is likely creating overhead supply exactly as the market tries to break higher. It's an indication that conviction remains shaky among those still underwater from earlier in the cycle.
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