Bitcoin Price Correction Triggers Panic Selling
According to on-chain data, Bitcoin speculators known as "hodlers" sold off more than $2 billion worth of BTC on December 12th alone as the price of Bitcoin corrected towards $40,000. This panic selling is the largest single-day drop of 2023.
Short-Term Holders Set Selling Record
Entities holding BTC for 155 days or less, known as short-term holders (STHs), sent a total of $3.01 billion worth of coins to exchanges on December 11th and 12th. This selling pressure from STHs, both in profit and loss, marks an 18-month high in terms of selling activity.
Retail Investors Feeling the Heat
James Van Straten, a research and data analyst at crypto insights firm CryptoSlate, highlighted the significance of the recent selling activity from STHs. He noted that the majority of those who bought Bitcoin between December 6th and December 13th were retail investors who entered the market after seeing the price of Bitcoin rise by 150% year-to-date.
Resistance Looms as STHs Take Profits
On-chain indicators suggest that STHs may be experiencing exhaustion and taking profits after Bitcoin's recent rally. The Mayer Multiple, which measures the relationship between the current spot price and its 200-week moving average, is approaching 1.5. This level has historically acted as resistance during bull markets.
Overall, the recent selling activity from Bitcoin hodlers reflects a cautious outlook on the market and a desire to secure profits after a strong rally. It is important for investors to conduct their own research and consider the risks involved in any investment or trading decision.
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