Investors with a longer-term horizon look to be boosting their bitcoin holdings amid calls for a more profound price drop.

Glassnode data shows the bitcoin “hodler net position change,” which tracks net buying/selling activity of those holding coins for six months or more, has flipped positive for the first time since late October. Hodl is crypto slang for hold.

“It shows HODLers are buyers here,” Delphi Digital said in its daily market commentary dated June 16. “The net positions of BTC HODLers is a strong indicator of how longer-term investors are thinking about BTC.”

Supply held by long-term holders has increased from 11 million to more than 11.6 million in the past few weeks, according to Glassnode.

Bitcoin: hodler net position change
Source: Glassnode

While holders are now injecting bullish pressure into the market, that does not necessarily imply a sharp rally. Past data show bullish trends mostly pick up the pace after sustained accumulation by holders.

For example, the indicator remained positive for most of 2018, which was a negative year for bitcoin, and early 2019, when the cryptocurrency remained sidelined below $5,000. Bullish mood returned to the market in the second quarter of that year, pushing the cryptocurrency to $13,880 by the end of June.

Bitcoin: hodler net position change (2018-2020)
Source: Glassnode

Bitcoin scaled that peak in October 2020 – after a gap of 16 months. During that period the cryptocurrency was mainly in a bearish trend, falling from $13,000 to $4,000 between August 2019 and March 2020. Holders were net buyers throughout and during the subsequent recovery, and began distributing coins in November.

It remains to be seen if they will continue to be net buyers over the coming weeks and restore the battered market confidence.

Some chart analysts, though, are worried the cryptocurrency could see more selling in the short term because the daily plot shows the 50-day and 200-day simple moving averages (SMA) are set to produce a “death cross” (bearish crossover) in the next day or two.

Bitcoin impending death cross
Source: TradingView

According to Kraken’s research, the previous instances of death crosses on the daily chart coincided with “either a sell-off in the days that followed or a continued macro downtrend that confirmed a bear market.”

Macro funds, which bought bitcoin as a store of value, may sell if U.S. Treasury bond yields rise further. The U.S. two-year yield reached a 12-month high of 0.219% and the 10-year yield rose nearly 10 basis points to 1.59% on Wednesday after the Federal Reserve signaled a future interest rate increase for earlier than some had anticipated.

Also read: Federal Reserve Officials Raise 2021 Inflation Projection, Powell Addresses Asset Purchases 

Bitcoin is currently trading at $39,450, a 2% gain on the day.

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