Grayscale’s recent sell-off has spotlighted a key Bitcoin metric, shaking expectations as the cryptocurrency world edges closer to its next halving event. Delving into the specifics, the “Supply Last Active” (SLA) metric which traces the time since Bitcoins last moved on the blockchain.
This measure, spanning activity from over a year to beyond five years, offers insights into market cycles by tracking the behaviour of long-term investors. Yet, the outflow from Grayscale, originating from long-dormant wallets, paints a current landscape vastly different from historical precedents.
Glassnode, a leading analytics platform, showcases this divergence by charting SLA metrics across various timeframes as a percentage of Bitcoin’s circulating supply. Typically, an increase in these metrics signifies the holding pattern of long-term investors, whereas a decrease points to the movement of older coins into new hands. Notably, during market highs, long-term holders—individuals holding Bitcoin for over 155 days—have historically capitalized on their investments, reducing their holdings as they cash in on the gains from preceding bear markets.
The recent peak in Bitcoin’s value saw a downturn in all SLA segments from their zeniths, coinciding with the sale of approximately 300,000 BTC by the Grayscale Bitcoin Trust (GBTC). This sale is particularly impactful as GBTC purchasers are considered long-term holders, especially those buying at a discount in recent years, skewing the SLA data.
Upon closer examination of the net position change among long-term holders, it has been revealed that the selling intensity is comparable to that of the peaks observed in 2013, 2017, and 2021. However, the current market atmosphere does not reflect the typical sentiment of a peak phase, even with the halving event looming in about 15 days.
Furthermore, examining Bitcoin’s Short-Term Holders platform reveals a dominant pattern of profitability, wherein profits surpass losses by a margin of 50. This indicates strong protection of investment costs by the market’s participants during corrections, as demonstrated by the consistent returns to the equilibrium level of 1.0 in the Profit/Loss ratio.
The recent update about Grayscale’s significant divestment has caused an unexpected turn of events in the Bitcoin market. This development highlights the complex and multifaceted factors that can influence Bitcoin’s market dynamics. It also signals a potentially unpredictable period ahead, particularly in the lead-up to the halving event. As the market adjusts to the latest changes, how Bitcoin and other cryptocurrencies will fare in the coming weeks and months remains to be seen.
