Understanding Bitcoin UTXO: Mid-To-Long Term Holders Responsible For November Correction
December 03 2021 - 2:00PM
NEWSBTC
Data reveals that mostly mid-to-long term holders were selling
their Bitcoin during November, thus being responsible for the
correction. Bitcoin UTXO Age Shows Mid-Term Holders Sold Their
Coins In November As per the latest weekly report from Arcane
Research, mid-term holders seem to be behind the decline in BTC’s
price during the month of November. The relevant on-chain indicator
here is the “UTXO Age.” UTXO stands for Unspent Transaction Output;
you can think of it as a Bitcoin mechanic that keeps track of coins
on the chain. The UTXO age metric measures how long it has been
since a coin on the BTC blockchain was last transacted. Based on
the amount of time each coin hasn’t been moved for, the
corresponding holders can be categorized into short-term holder
(STH), mid-term holder (MTH), and long-term holder (LTH). Arcane
Research takes UTXO age shorter than three months as belonging to
STH, and longer than one year as LTH. Holders falling in the period
in between are termed MTH. Now, here is a chart that compares how
the supply belonging to the different Bitcoin holders moved during
the month of November: Looks like the mid-term supply reduced over
the course of the month | Source: The Arcane Research Weekly Update
- Week 47 As you can see in the above bar graph, the Bitcoin
short-term supply saw significant growth during the period as it
went from 14.9% at the start of the month, to 17.2% at the end.
Related Reading | Canada Marks Launch Of First Bitcoin,
Ethereum ETFs With Monthly Payouts This growth suggests that some
holders in the longer age bands sold off their coins. From the
chart, it’s visible that the MTH supply had a sizeable drop during
the month. This means that most of the increase in the Bitcoin STH
supply can be accounted for by the sell-off from mid-term holders.
Also, the one-to-three year supply saw some increase as well. This
means that part of the MTH supply matured and entered into this
longer age band. Related Reading | “The United States Is
Already Mining” Bitcoin… “Maybe,” Says Compass Mining CEO The 3-5
year supply also had a slight decrease in November, suggesting that
some of these long-term holders reaped their profits, and thus
added to the increase in STH supply. So in conclusion, selling from
mostly mid-term holders with some long-term holders may be behind
the correction in November. BTC Price At the time of writing,
Bitcoin’s price floats around $55.5k, up 2% in the last seven days.
Over the past month, the crypto has lost 11% in value. The below
chart shows the trend in the price of BTC over the last five days.
BTC's price has mostly moved sideways in the last few days |
Source: BTCUSD on TradingView Featured image from Unsplash.com,
charts from TradingView.com, Arcane Research
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