Long-term holders of the first cryptocurrency continue to open new long positions during the asset's 20 percent correction. Experts Explain How Large Coin Purchases Can Affect Its Value
The latest weekly research report from Glassnode, released on November 22, states that long-term Bitcoin holders continue to actively accumulate cryptocurrency despite a nearly 20 percent correction in the asset after hitting an all-time high of $ 69K. Topplabs.org experts explained why investors are actively accumulating bitcoin and how this may affect the digital asset market.
The increase in the number of bitcoins on the addresses of long-term holders is an indicator of the mood in the crypto market, says Nikita Soshnikov, director of the Alfacash cryptocurrency exchange service. According to him, when investors increase their savings, this indicates high expectations for the growth of the cryptocurrency.
“Given that the crypto market is extremely dependent on the emotions of its participants, the sentiment indicator is an important indicator of where the market is going to move in the near future,” the expert noted.
Soshnikov explained that crypto market participants expect higher growth in bitcoin and are in no hurry to exit positions, hoping for higher profitability in the near future. According to the expert, the majority of bitcoin buyers at the level of $ 20-30 thousand expect to increase their investments not twice, but 5-10 times.
“These investors, in my opinion, if they start fixing profits, then somewhere above $ 120- $ 150 thousand. fix profits in the foreseeable future or at levels below $ 250 thousand, ”Soshnikov added.
The main reason for the accumulation of bitcoins by long-term holders is the high rate of inflation, says Mikhail Karkhalev, financial analyst at Currency.com crypto exchange. In his opinion, the statement of the representative of the US Federal Reserve Christopher Waller, in which he called bitcoin a digital version of gold, could increase interest in the first cryptocurrency.
"Usually, representatives of the FRS just do not say anything, and this statement could be taken by large holders as a signal that the Fed and other world central banks will start buying BTC in reserves," the analyst explained.
The price of bitcoin directly depends on the accumulation of the asset by long-term holders, says Karkhalev. According to him, usually large transactions for the purchase of the first cryptocurrency take place on OTC-markets ("Over-the-Counter", outside the exchanges). When OTC sellers run out of an asset, they follow it to crypto exchanges, buying most of the available supply and thus increasing its value.