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Bitcoin’s wild ride this month has understandably left some investors jittery. After setting a new high above $64,000, BTC suddenly plunged to around $47,000 before inching back up to 55196 at the time of writing based on Coinmarketcap data.
Bitcoin’s huge price fluctuations this month have shaken out a lot of traders. However, it appears that the correction mostly rattled short-term BTC traders while those who held the crypto for longer periods of time were relatively unmoved by the price movement.
“Both on-chain transaction volume and fees peaked to new all-time highs this week whilst the typical age of spent coins has fallen back to levels not seen since price was below $20k,” Glassnode wrote in a report published on Monday. “Overall this suggests this correction has largely affected relatively newer entrants to the market and strong hands remain strong.”
Specifically, Glassnode pointed out that only a very small portion of Bitcoins bought more than a month ago, called “old cons” in the report, changed hands. “Investigating the Spent Output Age bands, we can establish a view on the typical age brackets for coins spent this week,” Glassnode wrote. “It can be seen that coins older than 1-month represent a very small and declining proportion of the total transaction flow.”
On the other hand, the blockchain analytics firm noted that an increase in transactions using “young coins,” or BTC held for less than a week before being sold or spent. “Conversely, the number of young coins (< 1-week old) being spent have seen an uptick towards the end of the week suggesting newer market entrants were shaken out during this correction,” the company added.
The report also pointed out that older coins remain unaffected the most. “Notably, coins older than 6-months have not seen a meaningful increase in spending since the correction back in February,” the firm said.
According to the report, this trend could suggest that those who have invested in Bitcoin for a longer period of time remain confident of its future potential. “This downtrend in Average Spent Output Lifespan (ASOL) has persisted since mid-January suggesting that old hands remain confident despite volatility and higher prices creating incentive to take profits,” Glassnode said.
