Plunge

2024

Bitcoin

Following the cycle low in November 2022, capital has progressively shifted towards the leading cryptocurrencies at the top of the digital asset risk curve.
Bitcoin, for one, has seen its dominance expand once again as a certain cohort of holders continued to support the growth. However, the same cannot be said for other crypto assets.
<h2 id="bitcoin-strengthens-market-dominance">Bitcoin Strengthens Market Dominance</h2>
According to Glassnode’s latest <a href="https://insights.glassnode.com/the-week-onchain-week-34-2024/" target="_blank" rel="noopener noreferrer nofollow" data-wpel-link="external">report</a>, Bitcoin’s dominance has surged from 38% in November 2022 to a remarkable 56% of the entire digital asset market today.
On the other hand, Ethereum, as the second-largest asset in the ecosystem, has experienced a 1.5% decrease in dominance, remaining largely unchanged over the last two years. Stablecoins and the broader altcoin sector have witnessed more significant declines of 9.9% and 5.9%, respectively.
Despite the recent market turbulence, long-term holders have consistently secured around $138 million in daily profits. Glassnode found that the $138 million in daily selling pressure from this particular cohort of Bitcoin investors likely reflects the amount of capital needed each day to absorb this supply and maintain stable prices.
Although market conditions have been volatile, the report said that “prices are generally flat over the last few months, suggesting a form of equilibrium is being reached.”
Interestingly, the supply held by long-term holders is currently rising rapidly, and <a href="https://cryptopotato.com/the-big-players-are-buying-bitcoin-whales-scoop-up-94-7k-btc-in-just-6-week/" target="_blank" rel="noopener noreferrer nofollow" data-wpel-link="internal">data</a> suggests that this trend highlights that HODLing behavior is far surpassing spending. However, it is the short-term holders who have faced the brunt of the losses during the recent downturn.
<h2 id="short-term-investors-overreaction-triggered-plunge">Short-Term Investors “Overreaction” Triggered Plunge</h2>
Bitcoin may have recovered to $60,000, but Glassnode said that its plunge of over 15% to a six-month low of $49,500 in the first week of August was triggered due to an “overreaction” by short-term holders. Currently, many such investors, defined as those holding BTC for less than 155 days, who bought during the 2024 rally are facing unrealized losses.
As such, the MVRV ratio for these investors has dropped below 1.0, indicating they are largely responsible for the losses following the market correction.
Meanwhile, the report further stated the hit taken to investor sentiment may not be as severe as it may seem at face value.
The post <a href="https://cryptopotato.com/bitcoins-market-dominance-grows-sustained-by-long-term-holder-support/" rel="noopener noreferrer nofollow">Bitcoin’s Market Dominance Grows, Sustained by Long-Term Holder Support</a> appeared first on <a href="https://cryptopotato.com/" rel="noopener noreferrer nofollow">CryptoPotato</a>.

Bitcoin’s Market Dominance Grows, Sustained by Long-Term Holder Support

Table of Contents

CryptoPotato_News

Other articles published on Aug 21, 2024

Tether Introduces Stablecoin Pegged to UAE Dirham

DOGS Token Gains Binance Listing With Trading Pairs on August 26 and Farming on August 23

Top Analyst Says Bitcoin Avoided Major Breakdown Despite Liquidations; Outlines Path to $50K

Kamala Harris To Back Crypto Market Following DNC Policy’s Heavy Backlash

Jaredfromsubway.eth Unleashes New MEV Bot & Sandwich Tactics

Crypto: Bullish Sentiment around ADA is Skyrocketing!

Join our free newsletter for daily crypto updates!