Short-term Investors Closing Wallets, Is it a Signal for a Major Bitcoin Bull Run?

▲ Bitcoin (BTC) ©

As the leading cryptocurrency Bitcoin (BTC) firmly holds its ground at the $77,000 mark, an interesting on-chain analysis has emerged, suggesting that while short-term investors in the market halt trading and close their wallets, this is, in fact, signaling the beginning of a full-fledged long-term bull market.

According to the cryptocurrency media outlet Bitcoinist on April 29 (local time), Bitcoin is taking a breather after its recent rally over the past few days but is still defending the crucial support level of $77,000. Amidst positive investor sentiment spread across the market, key on-chain indicators show a subtle yet significant decrease in the activity of Short-Term Holders.

On-chain data analysis platform Alphractal pointed out that despite Bitcoin's price gradually trending upwards, the Short-Term Holder (STH) Active Supply Ratio has been steadily declining since the beginning of this year. This indicator represents the percentage of coins that have moved at least once within the last 180 days and is primarily used as a measure of activity for short-term investors who are sensitive to volatility or news.

The divergence phenomenon between these two indicators – rising Bitcoin price and falling active supply ratio – means that short-term investors newly entering the market are gradually reducing their activity. In other words, as market conditions improve, investors are choosing a strategy of holding onto their assets for the long term rather than pursuing quick profits through premature short-term trading.

Alphractal explained that this phenomenon typically appears when blind optimism in the market subsides and the activity of short-term speculative forces cools down. Experts assessed that this pattern of decreasing short-term active supply is, in fact, a positive signal indicating that the market is shedding its froth and entering the early stages of a more sustainable, resilient, and robust major bull run.

Meanwhile, Bitcoin is currently facing a critical test that will determine its long-term direction over the next several months. Cryptocurrency data analyst On-Chain Mind analyzed that Bitcoin is currently testing the Short-Term Holder Realized Price formed around $78,000. Historically, this zone has acted as a crucial watershed separating bull and bear markets, and if this resistance level is successfully breached, the door to the next bull market will open wide, but if it fails to break through and is pushed back, further declines in a typical bear market pattern are inevitable.

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