Bitcoin (BTC) is experiencing a shift in ownership as long-term holders have been selling off some of their holdings. This has caused a slight imbalance in the market, as newer wallets aged under three months accumulated these coins. While this shift has caused some selling pressure, the overall trend for BTC is still towards long-term accumulation.

The recent weeks have shown a back and forth movement between long-term and short-term holders, with experienced traders taking profits and locking in gains. However, BTC is currently down from its peak, leaving a new cohort of buyers to navigate the market's volatility.

Despite this, most buyers are still in the money, except for a small group that bought above $98,000 per BTC. The recent buyers include unknown whales, ETF deals, and renewed buying by MicroStrategy and Mara Holdings. The intentions and time horizons of these buyers vary, but the potential impact of short-term holders aiming to lock in gains remains unknown.

The average cost basis for all BTC holders has been slowly rising, reaching over $40,000 in the second half of 2024. The data also shows a trend of new cohorts rapidly expanding their holdings, particularly in the 1-3 months range. These short-term holders have been taking advantage of price dips to accumulate more coins, which may indicate bullish expectations for the first quarter of the year.

The Rainbow Chart suggests that BTC is in another accumulation zone, indicating the potential for new all-time highs. However, the recent cohorts of holders may react to price drawdowns if they approach their pain zone. Currently, BTC has recovered to $98,513.40, with short-term holders experiencing an average unrealized gain of 10%.

The short-term holder index, currently at 1.1%, suggests that holders are not facing immediate pain but are holding with a relatively thin margin. The index itself does not predict behavior, but the 1.0 level is closely monitored. During the past year, the short-term holding index ranged between 0.85% and 1.44%, with short-term holders experiencing average gains of 35% during the November price peak.

Miners remain relatively safe holders, with over 1.9 million coins still in their possession. They have lower average cost bases and have not been actively adding new coins to their treasuries recently, unlike some corporate BTC treasuries like MicroStrategy and Mara Holdings.

Overall, BTC is still in an accumulation zone, with the potential for new all-time highs. The market is experiencing a shift in ownership, and the behavior of short-term holders may determine the short-term price movement. Miners and long-term holders continue to play a significant role in the market.



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