BTC holdings of Bitcoin hodlers fall to year-long lows

The trend of hodlers reverses amid a pullback, as short-term traders see their positions grow.

The Bitcoin (BTC) hodler community is facing a drastic change, with a significant reduction in cryptocurrency holdings amid speculation over recent market volatility. The value of Bitcoin fell 4.99% on Monday, reaching $93,010, marking the lowest levels in a week.

Bitcoin (BTC) hodlers pushed the amount of bitcoins in circulation in these wallets to 12.48 million, representing a 9.55% drop over the past year, according to data from IntoTheBlock / TradingView

The fall of hodlers

Hodlers, those investors who hold bitcoin (BTC) for extended periods, began to unload their positions. These brought the amount of bitcoins in circulation in these wallets to 12.48 million, which represents a drop of 9.55% in the last year, according to data from IntoTheBlock. This shift could be part of a profit-taking strategy following the recent rally that almost pushed the price of bitcoin to $100,000, driven by the victory of President Donald Trump.

Short-term investors increase their numbers

On the other hand, bitcoin traders, who usually hold their assets for shorter periods of between one to three years, increased their participation in the market. In the latest rally, their positions grew from 1.25 million to 2.26 million Bitcoin, indicating an increase of 78.27% in the last 12 months. This group seeks to capitalize on market fluctuations and maximize their profits in short periods.

Trading and market flows

In the current context, the bitcoin market is experiencing a significant negative flow of USD 875.49 million in the last 24 hours. This data suggests that several investors are liquidating their cryptocurrencies in response to rising prices, thus taking advantage of the speculative environment. Recent metrics show that over 98% of Bitcoin wallets are currently in the black, creating incentives to complete these sales.

Open interest in Bitcoin derivatives reached all-time highs, driven by speculators who drove up prices through perpetual futures contracts, causing the market to remain in a state of constant fluctuation.

Bitcoin trading is undergoing a period of transformation, with clear divergences between hodlers and traders. While the former choose to liquidate positions in the face of market uncertainty, the latter continue to expand their portfolios in the short term. This dynamic could define the next phase in the evolution of the world's most prominent cryptocurrency.

Disclaimer: This article is for informational purposes only and should not be considered financial advice. Investing in cryptocurrencies involves risks and may not be suitable for all investors.