Bitcoin markets recently experienced two major liquidation events, causing a cascade of forced selling from over-leveraged traders, but analysts say a distinct pattern has emerged.
“Overleveraged short-term traders were flushed out, long-term holders have been quietly capitalizing on the reset,” CryptoQuant analyst Amr Taha said on May 26.
They noted the first flush occurred when Bitcoin ( BTC ) fell below $111,000, and over $97 million in long positions were liquidated. As its price broke $109,000, another $88 million in longs were wiped out in the second wave.
However, as short-term traders faced margin calls and forced selling, long-term holders (LTH) responded very differently and increased their accumulation.
This caused the long-term holder realized capitalization to surge past $28 billion, a level not seen since April. Realized cap is a measure of the value of each Bitcoin based on the last time it was moved, rather than the current market price.
Long-term investors are using this period of forced selling to increase their exposure and accumulate more Bitcoin for the long run, Amr Taha noted. “This strategic accumulation during moments of market stress reflects the deep conviction of LTHs.”
“Rather than being shaken out by short-term volatility, they [LTH] see these liquidation-driven dips as prime opportunities to strengthen their positions, reinforcing the foundation for future price appreciation.”
