Bitcoin has recently surpassed the $90,000 threshold, offering significant benefits to long-term holders compared to their short-term counterparts, although the dynamics underpinning the market reveal more complexities.
Data from the on-chain analytics firm CryptoQuant indicates a notable divergence between long-term and short-term Bitcoin holders.
Behind the Scenes: What Bitcoin Smart Holders Are Doing Right Now
“If long-term participants continue increasing their positions, while short-term supply gets flushed out, this setup may serve as a constructive base for future price recovery.” – By @IT_Tech_PL pic.twitter.com/Wph6fKleXN
— CryptoQuant.com (@cryptoquant_com) April 22, 2025
While long-term holders are methodically expanding their holdings, short-term holders appear to be succumbing to market fears and uncertainties, leading them to offload assets during downturns.
The full report reveals that the Net Position Change metric for Long-Term Holders (LTH)—defined as those holding Bitcoin for more than 155 days—has turned positive for the first time since the last market peak.
This change suggests a significant shift in market sentiment among seasoned investors who are strategically re-engaging with the market.
Their ongoing accumulation contrasts with the distribution seen in recent months, a trend often interpreted as cyclical repositioning rather than reactive maneuvers.
Conversely, Short-Term Holders (STH), those who have held Bitcoin for less than 155 days, continue to experience net losses, with their Net Position Change remaining firmly negative.
Historically, this kind of divergence in behavior between long- and short-term investors has signaled impending broader market recoveries.
Rising Futures Activity and Liquidity Point to Renewed Confidence
As on-chain data hints at strategic accumulation, the derivatives market also shows promising signs. CryptoQuant analyst Axel Adler Jr. noted a substantial uptick in futures market activity over the past three days, with traders opening positions totaling 57,000 BTC, valued at approximately $5.34 billion at current prices.
Over the last three days, positions totaling 57,000 BTC were opened in the futures market, worth $5.345B at the current rate. This is the largest liquidity increase in the past year. pic.twitter.com/VE08w0ZvhQ
— Axel Adler Jr (@AxelAdlerJr) April 23, 2025
This influx represents the largest liquidity increase in the futures market in over a year, coinciding with Bitcoin’s rise above the $93,000 mark.
Supporting this trend, data from CoinGlass indicates that long positions on Bitcoin have surged by over 33%, reaching a 24-hour volume of $74.4 billion, while short positions have decreased by 27.5% to $68.2 billion.
As of April 23, long positions comprise over 44% of all open interest, with total futures open interest hitting a record high of $121.6 billion, primarily driven by platforms such as CME and Binance.
This influx of liquidity and leveraged positions reflects a renewed bullish sentiment among traders.
However, this heightened leverage also raises concerns about market stability; swift price corrections could trigger a cascade of liquidations, increasing volatility.
Nonetheless, this capital surge signals a market poised for a potential breakout rather than a retreat.
Macroeconomic Tailwinds and Technical Breakouts Add Momentum
Contributing to Bitcoin’s recent price movement are broader macroeconomic developments. A significant factor has been the perceived easing of tensions in the ongoing US-China trade dispute.
U.S. Treasury Secretary Scott Bessent recently characterized the current tariff situation as “unsustainable,” stirring optimism for resolution.
President Trump echoed this sentiment, suggesting substantial reductions in tariffs on Chinese products while reaffirming his confidence in Federal Reserve Chair Jerome Powell.
These geopolitical developments have bolstered investor confidence in risk assets, with the cryptocurrency market showing a strong response.
Consequently, Bitcoin climbed as high as $94,000 on April 23, coinciding with a 6.7% increase in total crypto market capitalization to $2.94 trillion. Ether also experienced a sharp surge, rising by 13% in the same period.
Technical indicators are aligning favorably for Bitcoin as well. Analyst ShayanBTC from CryptoQuant noted a significant reversal in Bitcoin’s futures funding rates, which had earlier dwindled during the previous market correction.
Bitcoin Funding Rates Highlight Weak Derivatives Demand
“The current state of Funding Rates aligns with the broader market’s sentiment, where participants exhibit hesitation, particularly after the rejection at $108K.” – By @ShayanBTC7
Link https://t.co/FaZFOgKvkN pic.twitter.com/km8pTtwUVx
— CryptoQuant.com (@cryptoquant_com) January 8, 2025
A historical trend shows that a simultaneous drop in both price and funding rates suggests a less speculative environment.
The recent increase in funding rates indicates a renewed interest in long positions, suggesting a decisive shift in market sentiment toward bullishness.
At the broader market level, the overall capitalization has broken out of a falling wedge formation, noted as a bullish signal. After retesting and surpassing the 50-day simple moving average at $2.68 trillion, the market is now eyeing a technical target of $3.12 trillion.
However, reaching that target necessitates overcoming significant resistance at the 100-day and 200-day moving averages, which lie between $2.93 trillion and $2.94 trillion.
Additionally, the current surge in Bitcoin is bolstered by a notable short squeeze. In the past 24 hours, over $624 million in crypto positions have been liquidated, including $545 million in shorts. This marks the largest short liquidation event of the year, eclipsing the $426 million liquidated in a prior sharp rally on November 6.
This recent ascent above $90,000 for Bitcoin may be the beginning of a more substantial upward trajectory, driven by multiple converging factors. If these trends persist, the price action could set the stage for Bitcoin to challenge its all-time highs.
The post Bitcoin Long-Term Holders Accumulate as Short-Term Traders Capitulate: CryptoQuant appeared first on Finance Newso.
