Bitcoin's Latest Price Rally May Face Selling Pressure from Short-Term Holders

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As Bitcoin continues to surge in value, reaching a high of $23,000, market intelligence firm Glassnode has warned that the recent rally may lead to selling pressure from short-term holders looking to cash in on their profits.

The firm defines short-term holders as those who have held Bitcoin for less than 155 days. In its latest analytics report, Glassnode reveals that this recent rise in price has pushed 97.5% of short-term holders into the green, a phenomenon that hasn't occurred since Bitcoin reached its all-time high.

Selling Pressure Imminent

The report states that with 97.5% of short-term holders now having unrealized gains, selling pressure is imminent. "Interestingly, during bear markets, when [over] 97.5% of the acquired supply by new investors is in loss, the chance of seller exhaustion rises exponentially.

Conversely, when [over] 97.5% of short-term holder supply is in profit, these players tend to seize the opportunity and exit at break-even or profit," the report explains.

Miners also Selling Bitcoin

The report also states that miners are selling Bitcoin as a result of the recent price surge.

Glassnode's analytics show that due to the increase in income for miners denominated in Us Dollars, there has been a change in miner behavior, with an accumulation of +8,500 BTC per month transitioning to a distribution of -1,600 BTC per month.

Additionally, miners have spent approximately -5,600 BTC since January 8th, resulting in a year-to-date net balance decline.

Different Data Points

However, other data paints a different picture. The report states that the amount of Bitcoin that has not moved in more than six months has increased by over 301,000 since the beginning of December, indicating a strong faith in the cryptocurrency among long-term holders.

As of now, Bitcoin is trading at $22,678, down 1.16% in the last 24 hours, but up 38% from its 30-day low of $16,464. Despite Glassnode's warning of selling pressure, it remains to be seen how the market will respond in the coming days and weeks.