In the post-ETF era, Bitcoin investors have fared poorly as the so-called “sideways summer” is driving them out of the market. On Thursday, as the leading cryptocurrency’s price fell back to $58,000, on-chain data revealed that most of the recent sell-offs came from investors who entered the market for the first time this year.
Cauê Oliveira, an author at CryptoQuant, wrote on Thursday, “During the downturn, approximately $2.4 billion worth of Bitcoin aged between three to six months was in circulation on the network.” He highlighted a significant surge in activity over the past few days.
This metric supports a common theory among on-chain analysts that coins which have changed wallets in recent months are more likely to move during price fluctuations than those held for five months or longer.
“These entities can be classified as ‘long-term’ holders, but their behavior may resemble that of short-term investors since they entered at the beginning of the year,” Oliveira explained.
He continued, stating that these buyers were likely influenced by the hype surrounding the launch of the Bitcoin spot ETF in January. After absorbing over $13 billion in net inflows in the two months prior to its listing, the performance of these funds has been mostly flat, as has the price of Bitcoin.
In contrast, Oliveira noted that entities holding for “over a year” have not shown signs of significant sell-offs, proving their greater courage in facing economic downturns.
According to LookIntoBitcoin data, the realized price for Bitcoin’s short-term holders is currently $64,614, about 10% higher than the current market price. This represents the average price at which the recent market entrants bought in and provides a rough estimate of when these new Bitcoin buyers might start panic selling.
Bitcoin initially lost this price support in mid-June, when CryptoQuant predicted that Bitcoin could fall another 8% to $60,000, which turned out to be correct.
Despite the sideways trading and concerning volatility since March, Bitcoin has not fallen more than 20% from its all-time high of $73,400, showing significant stability compared to previous cyclical bull markets. Nevertheless, considering the recent panic selling, another CryptoQuant author believes that the asset’s next support line could be far below the current level.
Axel Adler Jr. of CryptoQuant wrote on Twitter on Thursday, “The $47,000 level is 25% lower than the average purchase price of (short-term holders), which will be a good resistance point and a reshuffle for new buyers.” “The organic adjustments of previous bull markets lasted between 110 to 60 days.”
Edited by Ryan Ozawa.