Bitcoin Attempts to Steady Following Rout as Long-Term Bulls Maintain Bets

After a weekend of volatility, Monday saw a rebound as risk sentiment returned. This was due to easing concerns over Omicron coronavirus variants and signs that long-term investors were still firm.

After falling to $45,032 on Saturday, the price was flat at $49146.5

With early signs that the Omicron variant Covid-19 is not as fatal, investors have increased their appetite for risk assets.

Data showing that long-term bitcoin holders retained their bullish bets even during the recent selloff helped to ease macroeconomic worries.

Glassnode reported that only 2.63% of the older coin supply was sold into this group [bitcoin traders holding BTC for less then three months] since October 27.

The weekend’s bitcoin rout was likely driven by short-term traders who had leverage to fuel bullish bets.

According to the report, these investors are likely to have bought their coins at the tops and are now spending them [at loss] to buy new investments.

Some pointed out that funding rates, which is the cost of holding long futures positions on exchanges, was nearing neutral as an indicator that there was a wild swing or volatility event.

Investors rushed to close leveraged positions in the selloff that followed. The perpetual funding rate plunged to -0.035% for the first time in more than two months.

Sometimes, a reset in the funding bias can be a change of sentiment. It can take up to weeks to shift.

Glassnode stated that the trend of the previous funding reset in July didn’t reverse until October, which coincided with the record rally for Bitcoin.

BTC bulls might feel some comfort if the price action continues to be volatile.

“[O]ver 97% have remained unspent from the recent pullback and all-time high. Glassnode said that HODLers of older coins don’t spend them.


Rate this post