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October 3, 2022
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With Bitcoin HODLers selling, should you buy?

The number of Bitcoin HODLers currently selling has grown

Bitcoin’s price has largely remained below $ 50,000 and above $ 46,000 for the most part in the past two days. As we approach the weekend, there are no signs of slowing down. The price plummeted from the $ 51,000 level 2 days ago and has not recovered since there is a change in HODLers’ positions.

The Hodler net position change chart signals an increase in the number of HODLed coins being withdrawn weekly. A similar event occurred before the last $ 58,330 ATH fell; more HODLers and miners recorded unrealized profits in a short time, reducing prices.

Change in net position HODLer || Source: Twitter

Based on the chart above, more positions have changed significantly. More HODLed Bitcoins have been sold in the past two months than in the second half of 2020 combined. Does this mean that HODLers are making profits before directing investments to altcoins or DeFi, or is this an attempt to increase selling pressure and buy again at lower prices?

As the volume of Bitcoin HODLed by whales is increasing, at the same time as the sale is taking place, there is likely to be accumulation. This shift in long-term HODLers, and some of which are miners and whales, perhaps a shift to making profits before the next cycle.

The plunge is likely to open up an opportunity to buy more, thereby reducing the average cost per Bitcoin for HODLers. This means that the scope for unrealized profits can be broadened, motivating more HODLers to sell and leading to a drop in the value of the portfolio for active traders and HODLers who have bought above the current price level.

This is similar to MicroStrategy’s recent move to buy an additional 205 Bitcoins for almost $ 10 million in cash. These Bitcoins were purchased at an average price of $ 48,888 per Bitcoin, making it a critical price level that institutions that buy in this price range must endure.

MicroStrategy’s net Bitcoin holdings are 91,064, or the equivalent of $ 2.196 billion. Just like the HODLers who made profits to accumulate at a later price, to reduce their average price per Bitcoin, for MicroStrategy it is $ 24,119 per Bitcoin. The shift in HODLers’ positions played a key role in the price narrative during the spike that led Bitcoin to $ 58,330; therefore, the change in the net position of HODLers is a key metric to be observed in the short term.

Source: AMBCrypto

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