For the first time in over two years, short-term crypto holders (STH) have become more active in the BTC market than long-term holders (LTH), Glassnode said.
The company's latest market report opines that this could be an indication that a phase of accumulation in the crypto market has begun.
The Terra ecosystem collapsed in early May when UST's native stablecoin algorithm lost its tether. Opportunistic traders use the opportunities of falling prices in the crypto market to increase holdings.
The collapse of the LUNA system has resulted in over $60 billion lost from the LUNA and UST market caps, this collapse has a serious impact on the entire crypto industry. The entire market began to collapse, resulting in BTC losing up to $10,000 in value in a matter of days to annual lows.
Such extreme volatility, especially when assets are at risk of declining in value has influenced the nature of investors. Typically, those with higher confidence tend to hold on, while short-term holders rush to dispose of their assets, often at a loss.
While this is a common occurrence, Glassnode's latest report shows otherwise. Since the collapse of LUNA in early May, the supply of STH has increased by more than 330,000 BTC.
Glassnode explains that bitcoin usually shows signs that it is in an accumulation cycle or not. So far, the metric that shows current sentiment – Supply Active 1+ Years – is below the previous ATH marked in May this year at 65%. According to the analytical firm "this highlights the significant confidence of May-July 2021 buyers after the transition of the BTC mining site", which can be considered a "constructive mechanism in a declining market".
