Large hodlers amass Bitcoin below $50,000 as BTC transactions above $1 million surge.
The number of Bitcoin transactions worth more than $1 million has risen year over year, indicating increased institutional interest in the cryptocurrency market.
Institutions have not abandoned the Bitcoin (BTC) market, despite a 50%+ negative correction earlier this year, according to Glassnode statistics.
Since September 2020, the dominance of Bitcoin transactions above $1 million has increased threefold, from 30% to 70% of total value transmitted, according to the blockchain analytics platform.
Because ordinary investors rarely engage in large-volume transactions, Glassnode believes institutional investors are to blame for the increase in the $1 million–$10 million transaction category.
Furthermore, the company stated that the Bitcoin network handled the large transactions as the BTC/USD exchange rate dropped from $65,000 to under $30,000 in the second quarter of 2021.
“As the market traded down to $29k in late July, the $1M to $10M transaction group jumped significantly, boosting dominance by 20%,” Glassnode noted in a Monday report.
“This implies that these large-scale transactions are more likely to be accumulators than sellers, which is, once again, price-positive.”
Small transactions are losing their clout.
Additional volume data from Glassnode revealed a structural drop in small-size transaction dominance.
In summary, the share of deals worth less than $1 million declined by half, from 70% in September 2020 to 30%–40% in March–May 2021.
Small investors may have sold their Bitcoin holdings to lock in early profits, based on the falls.
The dominance plummeted to roughly 20% during the mid-May crypto market crisis, but it recovered to the 30–40% range as Bitcoin's price steadied above the $30,000 support level.
During the current run-up to values above $46,000, it stayed within the specified % range.
“[The data] clearly reveals that since 2020, a new age of institutional and high net worth capital has been flowing over the Bitcoin network,” Glassnode claimed.
The Hodl sentiment has returned.
Glassnode measurements, which tracked investors' hodling behavior, provided more proof of Bitcoin accumulation.
Long-term holders' supply ratios (LTH) hit an all-time high of 82.68 percent, according to the “Long and Short Term Holder Supply Ratios” indicator.
Meanwhile, the supply of short-term holders (STH) continues to drop, reaching 20%, indicating that holding and coin maturation are in play.
When the STH supply ratio approaches 20%, Glassnode believes there will be a substantial supply squeeze, i.e., a supply shortfall that will drive the underlying asset's price higher.
Who will, however, collect the remaining 5% of the modified supply?
According to a Glassnode metric, coins aged one to three months make up a significant share of the liquid supply.
“We can see that these age ranges have gone back to bear market equilibrium level of roughly 12.5 percent to 15 percent of supply after the upswing in Q1 (old coin distribution),” commented Glassnode, referencing the graphic above.
“This downtrend suggests that coin maturity is underway, and that many of the 2021 bull market investors have remained to become strong hand HODLers.”
At the time of writing, Bitcoin was trading at $45,930, down 0.73 percent from its intraday high.