Analysts at crypto exchange Bitfinex have noticed a significant shift toward spot trading for Bitcoin, resulting from long-term BTC holders persisting in their accumulation strategy amid unfavorable market conditions.
According to the latest edition of the Bitfinex Alpha report, long-term holders now have 80.34% of the total bitcoin supply, accounting for 15 million BTC. In comparison, assets with short-term holders have fallen to 19.34%. Analysts said this indicated a strong commitment to holding assets.
With long-term holders carrying on with their accumulation strategy, the realized profits and losses for bitcoin have been negligible. Bitfinex found that the realized profit and loss per BTC has plunged to its lowest since 2019.
The current realized profit stands at $724 while the loss is $236, compared to April 2021 and May 2022, when the average profit and loss figures were $12,900 and $6,700, respectively. Per historical data, the decline in realized profit and loss indicates that the market is in a transitional phase, as bitcoin has shown pronounced volatility when the figures slump to current levels.
“Given these current levels, which are markedly lower than the last cycle’s profit and loss figures, the majority of coin transactions are occurring around their original cost basis. This paints a picture of a market where the dominant players are either seasoned holders who are indifferent to price changes or traders scrambling for a slightly advantageous position,” Bitfinex said.
Furthermore, Bitfinex analysts noted that the gap in supply across long-term and short-term holders is significant because, according to BTC’s history, the behavior usually occurs at the onset of a bull market or the transitory phase where the market ranges for some time in an illiquid environment after a pullback.
As the crypto market remains illiquid, analysts believe that spot transactions will play a pivotal role in determining the movement in the upcoming weeks and months.
Meanwhile, BTC and Ether have witnessed a surge in open interest in futures markets, with the former’s aggregate across centralized crypto exchanges surpassing $8.7 billion, suggesting impending volatility and mass liquidations for both short and long positions.
