Bitcoin Crash Fuelled By Paper-handed New Holders: Here’s What Happened

Bitcoin brushed nearly $100,000 before new investors flipped the script, cashing out fast and hard to cause a Bitcoin crash. The frenzy realized $2 billion in profits in a single day, leaving the market reeling in its wake.

Glassnode’s latest report sheds light on a divide within the Bitcoin holder demographic. Many LTHs, who have kept their coins for extended periods, began to realize profits as BTC approached new highs, but not as much as new time holders. That said, on November 22 alone, profits totaling $443 million were cashed out across LTHs, breaking records for realized profits.

Interestingly, the sell-off seems to have been largely driven by coins held for six to twelve months, which accounted for 35.3% of the total sell-side pressure.

“The dominance of coins aged 6m-1y highlights that the majority of spending has originated from coins acquired relatively recently, highlighting that more tenured investors are remaining measured and potentially waiting patiently for higher prices,” Glassnode reported.

In non-nerd speak, the kids today have paperhands.

Can I get a chest thump and a “Mmmm… mmm-mmm… mmm-mmm-mmm…”

Meanwhile, older cohorts of Bitcoin holders—the so-called “diamond hands”—appear less inclined to reduce their BTC exposure and might be holding out for even bigger gains.

ETFs and Institutional Dynamics Dominate Bitcoin Price Action

The arrival of spot Bitcoin ETFs in the U.S. brought a fresh dynamic to the market, acting as a sponge for retail and short-term selling pressure. Yet, the tides turned fast—two volatile trading days saw a staggering $550 million flow out, leaving the funds wobbling under market fragility.

This institutional involvement has created mixed market sentiment. On one hand, the demand for ETFs remains robust, helping to stabilize Bitcoin’s price. On the other hand, concerns linger that these funds may not generate sufficient new capital inflows to offset the broader profit-taking trend.

Interesting last three days of ETF flows.

BTC: -$67.8mm
ETH: +$134.8mm pic.twitter.com/FlyWUwpSEq

— wrongplace (@wrongplace_eth) November 27, 2024

After nearly touching $100,000, Bitcoin’s weekend high of $99,500 turned into a $92,000-93,000 slide. Profit-taking slammed the brakes on its ascent. Analysts like Kyle Doops are watching clues from the Short-Term Holder Spent Output Profit Ratio (STH-SOPR), signaling short-term sellers pocketing gains.

“Opportunity might be just around the corner,” said Doops, hinting at a potential correction.

Despite recent volatility, Bitcoin’s market outlook remains optimistic, buoyed by positive sentiment and strong institutional activity. Long-term trends suggest that while short-term holders have sold, the appetite for BTC from ETFs and institutional players could propel new market moves.

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Bitcoin Price Analysis: TA After The Bitcoin Crash

Bitcoin

Price Trading volume in 24h Last 7d price movement clings to the $92,000-$94,000 range, locked in a tight squeeze. The Bollinger Bands are suffocatingly narrow, hinting at an inevitable breakout brewing just beneath the surface.

Moving averages paint a mixed picture; the 20-day SMA at $93,419 acts as resistance, a hurdle Bitcoin must clear (and has now cleared! Trading at $94,000 at time of publishing) to regain a bullish footing. Meanwhile, the 200-day SMA, anchoring at $92,659, provides a lifeline, averting a death cross as the 20-day SMA.

Bitcoin appears to be forming a symmetrical triangle. This is typically a continuation pattern, with the direction of the breakout likely setting the next major move.

Cracking $94,000 opens the door to $96,000 or beyond, but slipping under $92,000 drags Bitcoin toward the safety net at $90,000. The breakout’s direction holds the key—whichever way it tilts will pad or empty our pockets.

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