- Long-Term Bitcoin Holders (LTH) are defined as investors who hold Bitcoin for more than six months and are considered the smart money of the ecosystem. Typically, they will buy Bitcoin when the price is depressed and distribute in bull markets.
- However, LTHs capitulate and sell bitcoins when panic and fear sets in in the market, this can be seen below with these on-chain indicators.
- These metrics show that when LTHs sell bitcoins on exchanges, significant spikes occur in moments of fear and capitulation. These events include the collapse of LUNA and FTX, the ban in China in May 2021, and now a significant capitulation due to the collapse of Silvergate and then Silicon Valley Bank.
- Long-term holders have capitulated to levels similar to the FTX crash. Approximately 10,000 bitcoins were sent to exchanges, all sold at a loss.
- Surrenders, especially by long-term holders, can mark bottoms in Bitcoin cycles. However, the fallout and contagion from the banking and financial sector is still unknown, which will be short-term bearish for Bitcoin’s price action.
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