Short-Term Investors Closing Wallets, Is it a Signal for a Major Bitcoin Bull Run?

▲ Bitcoin (BTC) ©

As the leading virtual asset, Bitcoin (BTC), firmly holds its ground around the $77,000 mark, an interesting on-chain analysis suggests that short-term investors in the market are halting trading and closing their wallets, potentially signaling the beginning of a full-fledged long-term bull market.

According to the cryptocurrency media outlet Bitcoinist on April 29 (local time), Bitcoin is taking a breather after its recent rally but is still defending the crucial support level of $77,000. While positive investment sentiment prevails across the market, a subtle yet significant change is detected in key on-chain indicators: a clear decrease in the activity of Short-Term Holders (STHs).

On-chain data analysis platform Alphractal pointed out that despite Bitcoin's price gradually trending upwards, the Short-Term Holder (STH) Active Supply Ratio has been steadily declining since the beginning of this year. This indicator represents the proportion of coins that have moved at least once within the last 180 days and is primarily used to measure the activity of short-term investors who are sensitive to volatility and news.

The divergence phenomenon between the two indicators – rising Bitcoin price and falling active supply ratio – signifies that short-term investors newly entering the market are gradually reducing their activity. In other words, as market conditions improve, investors are choosing a strategy of holding their assets for the long term rather than pursuing quick profits through impulsive short-term trading, according to the analysis.

Alphractal explained that this phenomenon typically occurs when blind optimism in the market subsides and the activity of short-term speculators cools down. Experts evaluate this pattern of decreasing short-term active supply as a positive sign, indicating that the market is shedding its froth and entering the early stages of a more sustainable, resilient, and robust major bull market.

Meanwhile, Bitcoin is currently facing a critical test that will determine its long-term direction for the coming months. Virtual asset data analyst On-Chain Mind analyzed that Bitcoin is currently testing the Short-Term Holder Realized Price, which is formed around $78,000. Historically, this range has acted as a key watershed dividing bull and bear markets. A successful breach of this resistance level would open the door wide for the next bull market, but a failure to break through and a subsequent retreat would inevitably lead to further declines, typical of a bear market pattern.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*