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Even as Bitcoin continues to trade below $20,000, long term holders seem to be not interested in entering a position yet. In the past one month, Bitcoin showed high volatility, going back and forth around $20,000 for as many as seven times. Also, there is widespread speculation in the crypto community around possibility of further reduction in Bitcoin price.
Bitcoin Holders On Selling Spree
On-chain data from Crypto Quant suggests Bitcoin holders are actually selling BTC despite a downward trend in price. Contrary to an uptick in sale orders when the price is jumping, this time around it appears that holders are anticipating a further price fall. According to Crypto Quant author ghoddusifar, those holding Bitcoin from one year are selling.
“Despite the price reduction, 1 year holders are selling. This happens in the past cycles only when the price increases. It can indicate the fear of the holders of the market situation and the possibility of further price reduction.”
Overall, it appears that there is increasing selling pressure on long term Bitcoin holders.
All Time Low Risk Indicators
Meanwhile, the key risk indicator on Bitcoin reserves, which measures confidence of holders, is at an all time low. Murad, a crypto enthusiast, feels the market is currently at high time frame bottoming zone. He said in a tweet,
“The Bitcoin reserve risk indicator is at an all time low. It measures the confidence-level of long-term holders relative to current price. Indicator screaming undervalued. Either this indicator is broken or we are in the high timeframe bottoming zone. I lean towards the latter.”
In the last few months, Bitcoin reserve risk indicator has been on a sharp fall trajectory. As of writing, Bitcoin is trading at $19,510, up by just 0.13% in the last 24 hours, according to CoinMarketCap. On the other side, the Bitcoin fear and greed index continues to register an extreme low status.
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