Forex and Crypto News

Panic was triggered by short-term holders

20:10 17 March /2020

Last week, the cryptocurrency market experienced a sale, which reduced the price of all the cryptocurrencies. However, reports confirm that the panic sale was triggered by short-term investors.

Coin Metrics has analyzed coins that have not been used for some time. As the report showed, during the panic, 281,000 BTC were transferred between wallets that were stored in wallets without movement for more than 30 days. While the number of coins moved between wallets, which were stored without movement for 1 year or more, amounted to only 4131BTC.

Source: Coin Metrics Network Data Pro

This report demonstrates that the panic was triggered mainly by short-term investors. If Bitcoins were stored in the wallet for about 30 days or more, most likely they were purchased in December 2019 or January of this year, when the price of Bitcoin showed an increase. That is, small investors acquired Bitcoins during growth to resell them later, but more expensive. However, the fears escalated by the coronavirus prompted them to dump cryptocurrencies in fear of losing investment.

A logical question arises - why do long-term investors continue to store Bitcoins in their wallets? Some optimists believe in the price of Bitcoin of $20,000 and higher this year. Some Bitcoins are irretrievably lost by investors (they remain in wallets to which access is lost). And the most logical explanation is the purpose of Bitcoin. It was created as a deflationary, decentralized asset. In the darkest of circumstances, Bitcoin could become the new “digital gold."

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