Bitcoin may recover strongly from a recent crash according to data from various analytic angles. These statistics show that long-term HODL wallets are unfazed by the recent price tank and have accumulated more and more Bitcoin. This so-called double pump was last witnessed back in 2013.
Bitcoin’s price index saw a heavy crash earlier in May as the index dropped from around $50k to as low as $30k at one point before recovering to around $38k at press time. The sell-off was initiated mostly by wallets that had accumulated Bitcoin new or from exchange wallets. However, according to Glassnode, an on-chain analytics website, both miners and long-term HODL wallets sat out the latest crash. The data showed that wallets with lower frequency of spending output increased their Bitcoin reserves considerably during this time.
These wallets are often associated with HODLers because they are the ones that see little Bitcoin liquidating activity and mostly just focus on accumulation.
Miners and their wallet addresses are well known so it is easy to see their activities. Recently, despite the big crash in the market, the miners have also held on to their crypto in anticipation of higher future prices. However, it will be difficult for the miners to hold on to their ever-accumulating stash differently. This is because they need to pay for their power expenses which can be quite a lot.
The same behaviour was experienced by the cryptocurrency back in the early days after the first Bitcoin halving back. In 2013, the first major double pump was experienced by Bitcoin that resulted in considerable appreciation for the cryptocurrency. The pump occurs when a large number of long-term inflows are experienced by a limited asset. There are several indications that the cryptocurrency will witness it again in the near future.
However, there is one catch that might spoil the upwards trend shift for the cryptocurrency. There is a certain point at which some long-term HODLers especially miners realize that they cannot hold any more crypto for the time being and sell it on the market. This creates additional selling forces in the market and brings the price index down. Considering Bitcoin is already down and needs a pump, this sudden selling spree may make things very difficult for the bulls.
The added pressure is that the same happened only once and that too some time ago. It remains unclear how the cryptocurrency will respond to it.
Image Source: pixabay.com
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