André Dragosch, Head of European Research at Bitwise, has observed a negative trend in net buying volumes on Bitcoin spot exchanges over the past three days.
Despite this decline, Dragosch highlighted a significant rise in long-term Bitcoin liquidations, reaching their highest point since August 5, when Bitcoin hit a recent low. He noted this as a sign that short-term sellers may be exhausted.
“Short-term wallets have sent the most Bitcoin to exchanges at a loss since the August lows,” Dragosch said. He also pointed out that market sentiment, as measured by the Bitwise Cryptoasset Sentiment Index, has shifted from relatively bullish to more neutral levels.
Further analysis using Glassnode data reveals a shift in Bitcoin’s supply dynamics. While the illiquid Bitcoin supply has reached an all-time high, the supply classified as highly liquid and illiquid has dropped to yearly lows, suggesting changing market behavior as more Bitcoin moves into long-term holding patterns.
Ayush Tripathi, a Bitwise Research Analyst, added that despite the recent price decline, the supply of Bitcoin held by long-term holders (those who have held Bitcoin for at least 155 days) has increased since early October. This indicates continued confidence in Bitcoin as a long-term investment, even as short-term demand has weakened.