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Monday, October 3, 2022

Here’s Why (2013 vs 2017 vs 2021)

Um, here’s another interesting chart we’re talking about like the long-term short-term thing um. This is the supply held by long-term holders. So the way glass node classifies this is they use a certain threshold. So they you know, these people are like insanely. Smart, like the cto of glasgow, is like an ex-neuroscientist, so they do all kinds of heuristics and statistics to do this stuff, but they ran a statistic.

Uh study on on the behavior of different entities on the blockchain and they found that when you go past a certain threshold, the likelihood of um those entities selling just drops off dramatically, and so that threshold is 155 days or exactly five months um, and so that That’S how they distinguish long-term versus short-term holders, and so this chart is looking at the amount of supply held by long-term holders, and actually this might be more useful. I can compare it to um. The short-term holder starts like what is your personal strategy? Are you like fully uh got your core position taken out? Are you still cost averaging?

Are you uh, yeah sure um? I i mostly hold right, so i hold like uh 75 80 of my bitcoin and then i trade that smaller portion based off mostly on chain flows. But i do look at you know some things like ta, um order, book analysis and some other things just to get a more uh, well-rounded view as far as this dip in the last three months, though, you have, you, have i’ve just been slowly yeah. I’Ve just been slowly building up a position kind of in the bottom of that range. You know kind of between 30 35k um.

You know scooped up a little below you know below 30k, but mostly i was just averaging in that range because i was seeing you know mostly um on chain that that kind of reaccumulation phase cool, so this is this chart here – is looking at um. The supply held by long-term holders versus um short-term holders blue, is long-term. Yes, blue is long-term holders and then this kind of weird gold, brown color um is is short-term, and so what you see is i’m sorry. Let me move, i had the zoom thing and then in front of my cursor um. What you see is throughout you know, in a general sense, in bull runs.

You see long-term holders distributing their coins, while short-term holders um probably be useful. If i had the price in here right, would you say in general, um long-term holders distribute their coins into strength right. So this is. This. Is the smart money in the space that’s been in for a long time, and so they know um, you know retail will come in and fomo in during during bull markets.

We have these crazy overextended rallies where speculation just comes in and drives the price way up. Um and so this smart money starts, you know scaling out um. Let me change the color. This looks confusing. They start to scale out when, when we really start running up um, so here, you’ll see we’ll just look at the 2013 bull run and then we’ll look at 2017 and now so here in 2013 um.

Once again, the bottom line is uh short-term holders right and the top line is long-term holders going into the first uh. You know rally in 2013, short-term holders started buying, and then you see that long-term holder chart that started trending down. So you had distribution to those to those right short term holders are buying the tops of all of these uh rallies. Yes, exactly, and you know for a lack of better words, it’s it’s smart money distributing to uh dumb money. Uh!

That’S just i mean that’s just the truth, um when, when you get into um kind of this this midway point here, um what’s interesting, is you actually started to see um long-term holders accumulating again in between the two double pumps, and this is why i think this Is interesting because it’s similar to what you’re seeing now but we’ll get to that um when we, when we get down there um so yeah you started to see price was going down, all the speculators started, scaling out, long-term holders started buying in because you know this Was like from peak to trough, like 85 drawdown to the bottom, between the the two 2013 double pumps um, so you started to see long-term holders scoop up those cheap coins and then, when we rallied again, you saw speculators come in and drive that price up into That euphoric blow off top while those long-term holders scaled out. Once again here we head back into the bear market, and here you see once again short-term holders moving out. Bitcoin isn’t going up insane amount, so speculators leave and it’s not fun anymore, but the long-term investors with you know real conviction. They’Re gobbling up these cheap prices, they’re buying heavily right. So then we head back into the 2017 bull market and then, once again you start to see these short-term holders starting to buy up, and you start to see here.

The long-term holders begin to scale out once again, and so you see that distribution into the blow off top here, literally right at the blow off top you have. You know that this max uh, you know, distribution between the two and then you see once again the long-term holders begin to buy. This is beautiful. It’S just this beautiful divergence between the two things, and you can really see how the money that’s been in for a long time um. You know they have conviction in these lower prices when all the people that are new to the space are freaking out.

These people are stepping into buying very heavily um and, and once again here we are in in the current uh. You know current bull run that we’ve been in um. You know short-term holders coming in long-term holders began scaling out kind of towards the end of the year and kind of mid mid october of last year, and then you got to kind of the peak around around late uh march early early april. But what’s interesting is that now uh long-term holders have started buying again wall shorts from holders had began selling um, and so there you know, there’s four other instances that we just looked at where this happened. So a at the end of the bull market.

Here here i’m sorry, there’s three other instances um and then here between the two 2013 double pumps um – and this is this – is where the long-term holders actually were buying right, um and then you can also look here technically um, but i wouldn’t say this is this: Is you know quite as dramatic as this, but you did also see halfway through the bull market, that short-term holders began, selling off and long-term holders, um kind of, like pushed. You know the bull run into into that kind of final phase um. But i would say this is this was really kind of a better representation of where i believe we are now where you have long-term holders kind of coming in and set the floor um but zooming in i mean long-term holders are buying it. Like you’re saying, you think, you think it’s comparable to the beginning of 2017 is what you’re saying um well kind of late, 2016, um or or in my opinion, uh mid 2013. Just in the sense that you have this kind of mini bear, phase, um and the long-term holders and kind of strong hands are coming in and setting that floor by the way.

How long do you think? Because if it’s like comparable to, you know mid 2013 cycle, but even more so you know if it’s comparable to like late 2016 to me, that would imply we stop like a long time before we reach the eventual top. Do you think how far do you think we’re are into this cycle? How long do you think it’ll go yeah sure it’s a great question, um. You know, i don’t really look at timing.

To be honest, i think i think that’s just like really hard to predict and we only have two sample sizes right. We only have 2013 2017. So it’s like try to extrapolate the timing um. I i don’t really find that useful to be honest, um, but i try to look for like similar behaviors and then try to kind of estimate what’s going to go on in kind of intermediate term. Obviously, like what goes on months from now, i can’t really tell because i can only look at what the data is saying now, we’ll figure that out when we get there but um yeah, you know the way i see it is like the the timing could could Extend out to you know, mid 2022, it could be the end of this year.

I just personally have no idea about the exact timing, but i do see us having this kind of second run up. Yes, great clip to watch the full conversation. There is a link down below in the video description and, if you’re interested in learning more about cryptocurrency click subscribe, we drop a video every single day. You do not want to miss one like always see you tomorrow,

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