Long-term Bitcoin (BTC) investors seem to be taking advantage of the recent decline in the cryptocurrency’s price, as they accumulate more tokens. This move is in stark contrast to the ongoing uptick in Wall Street’s tech-heavy index, Nasdaq. According to blockchain analytics firm Glassnode, the long-term holder net position change indicator, which gauges net BTC entering or exiting exchange wallets, flipped positive early this April and has seen a significant surge in the past few weeks. In fact, net accumulation is happening at the fastest pace since October 2021, suggesting that investors view this dip as a typical bull market breather.
Crypto investment platform Q9 Capital highlights the increase in the net position change metric, saying that “long-term BTC holders are adding to their positions,” which indicates that they are treating the recent pause in price movement as an opportunity to acquire more. Glassnode defines long-term holders as wallets holding onto their coins for at least 155 days without selling or moving them.
However, there is reason for Bitcoin bulls to be concerned about the cryptocurrency’s divergence from the Nasdaq index. Matrixport’s Research and Strategy Head, Markus Thielen, believes that this decoupling could lead to a more significant divergence between the two. He notes that based on the relationship with tech stocks, Bitcoin should now be valued above $30,000. The fact that it’s not may cause short-term traders to be cautious.
Thielen adds that many equity investors have been expecting a U.S. recession, only to be disappointed as tech stocks continue their rally. This means that those shorts need to be covered. Unfortunately, Bitcoin does not have large outstanding shorts that could be squeezed, resulting in the potential divergence between Nasdaq and Bitcoin.
With Bitcoin’s recent decoupling from the Nasdaq index, the cryptocurrency market is experiencing a new phase. This scenario raises questions about the future interplay between these two markets and poses a question: Are Bitcoin and Nasdaq truly diverging, or is this just another stepping stone in their intertwined relationship?
It’s essential for investors to remain vigilant and consider both the positives and negatives of this current climate. While long-term Bitcoin investors may be enjoying this moment to accumulate more tokens, short-term traders must also be cautious and assess the risks and rewards of this potentially growing divergence. The cryptocurrency landscape is ever-changing, and investors must adapt to these shifts in order to maintain a balanced and informed perspective.
Source: Coindesk
