Financial analyst Willy Wu questioned the validity of the supply of long-term holders (LTH), one of the most commonly used indicators to assess Bitcoin market trends.
According to the vendor, This classification has been “obsolete” And it leads to erroneous interpretations of the movements of those known as veteran investors. And Bitcoiner.
“The term “long-term holder” is a misnomer. This is defined as a currency that has stayed in one direction for more than five months,” he says, commenting that “everyone is wary of graphics with misleading names.”
Wu believes that the decline in long-term supply in the market is more a reflection of “storage rotation.” In other words, when Bitcoin gets into the hands of new investors or transferred to a corporate organization such as the Treasury Department.
Analysts point out that This phenomenon is decreasing further in the current cycle than the previous one.
“The largest decline in LTH supply was in 2017. In fact, this is a sign of a strong bull market,” he explains. and add this There are now “much better ways to receive signals”. than LTH metrics.
This graph shows the supply of Bitcoin in the hands of LTH. People who became known by holding BTC for more than 155 days:
Popularity indicators
Given that this metric is widely used by on-chain analytics companies such as Glassnode, Woo’s criticism is not isolated. It is also offered by various companies and explorers such as BitBo and CryptoQuant.
This is because the indicator It is typically used to measure the distribution and spending of Bitcoin over different time periods.as widely reported on CriptoNoticias.
For example, in late October we reported that while LTH was selling some of its funds, exchange-traded funds (ETFs) and Bitcoin government bonds were absorbing much of its supply, which was limiting the rise in Bitcoin prices.
However, Julio Moreno, head of research at analytics firm CryptoQuant, This raises further questions regarding the use of this indicator. For him, it is desirable to “see the other side of the coin.” For this reason, he suggests focusing the analysis on the demand side rather than the long-term holders.
“Demand has not been able to absorb supply at high prices in recent weeks, and that is the reason for the price decline,” he declared, dispelling the idea that LTH movements were the cause of the recent price decline.
Samson Mo, CEO of JAN3 and a reference figure in the Bitcoin community, agreed with Mr. Wu and Mr. Moreno, saying, “He doesn’t know any OGs who are selling.”
On top of that, criticize the market’s unwarranted fearsin his opinion, this was invented by the investors themselves.
“It’s incredible how much fear paralyzes them. Focus on the big picture. Bitcoin will add zero. It’s only a matter of time,” he emphasizes.
