- Glassnode’s weekly on-chain report highlighted coin supply redistribution between Bitcoin’s long-term and short-term holders.
- Purchase of Bitcoin put options increased.
NEW DELHI (CoinChapter.com) — A report from crypto analytics firm Glassnode states that long-term holders (LTH) accumulated Bitcoin in 2021.
The on-chain data highlights that LTH added 16% to their treasuries in the current year. Despite Bitcoin losing nearly $20,000 from its Nov 2021 ATH, long-term holders only marginally trimmed their BTC positions. However, the supply held by investors dropped by just 0.1 million BTC, a minor change considering the price drop.
Meanwhile, long-term holders added 1.84 million BTC to their holdings, an increase of 16% over the last year. The latest accumulation brings the total Bitcoin held by LTH to 13.33 million BTC. Interestingly, on-chain data shows a noticeable redistribution in coin supply from short-term holders (STH) to long-term holders.
While the amount of Bitcoin held by long-term investors increased, short-term holder supply declined by 1.42 million BTC, reflecting a fall of 32% from 2020. The supply of Bitcoins held outside exchange reserves, also called Sovereign Supply, is at an all-time high as well.
Furthermore, long-term holders own nearly three-quarters of the total sovereign supply, with STH ownership is at 25.2% of the Sovereign supply. Glassnode noted that the transfer of wealth from STH to LTH wallets makes 2021 a period of macro consolidation.
The report also noted that exchange balances for Bitcoin registered very little change over the year. For example, BTC exchange reserves declined by just 2.5% from their opening balance of 2.62 million BTC to reach 2.56 million BTC at year-end.
Glassnode defines long-term holders as wallets holding Bitcoin for a period greater than 155-days. Some LTH wallets have left their Bitcoins untouched for the last five years. Such wallets hold over 23% of Bitcoin’s 21 million supply.
Bitcoin Put Options Sale Increases
As Bitcoin prices failed to break above the $51,000 resistance, put options on Bitcoin attracted increased interest from investors looking to guard themselves against a further decline in BTC prices. Deribit, a crypto derivatives exchange, shared that investors bought over 46,000 puts for Dec 31.
Options are a contract that gives its buyer the right, but not an obligation, to buy the underlying asset at a specific price on or before a set date. Put options are based on the speculation that the underlying asset’s price would fall to a certain level on or before the expiry of the contract.
Market volatility usually increases ahead of option expiries as investors hedge their positions change market dynamics. The large put purchases precede a $6 billion options expiry on Dec 31.
Meanwhile, Bitcoin prices jumped over 4% on Thursday, going from $45,770 to $47,901 before receding. BTC’s 200-day MA line currently acts as resistance for the token near the $48,500 price level. Further upside movement faces a challenge from Bitcoin’s 26-day EMA line at $50,000.
Moreover, the $51,000 price level remains the key resistance for Bitcoin prices, rebuffing any breakout attempts since Dec 4. On the other hand, bulls would try to keep BTC above immediate support at $45,500. If BTC fails to maintain an uptrend, prices could reach $44,100 before recovering.
The relative strength index for Bitcoin remains neutral, clocking 40.17 on the daily charts.
At the time of writing, BTC was trading at $47,380, up 0.21% on the day.