Bitcoin price dropped sharply after negative news emerged regarding spot Bitcoin ETF applications. After this, it started to rise again when it was revealed that the news in question was suspicious. Thus, the sharp fluctuations marked a turbulent day in the cryptocurrency market. How did BTC investors react in this process? Analysts of crypto analytics company Cryptoquant answered this question.
Short-term holders’ (STH) reaction to Bitcoin ETF wave
Cryptoquant analysts analyzed investor reactions and subsequent price changes post-Bitcoin ETF news through the lens of the SOAB indicator (Spent Exit Age Bands USD), shedding light on their actions and emotions. It is recorded that the 1 week-1 month group spent approximately 1 billion dollars. These investors entered the market between $40,200 and $44,700. It opted to exit breakeven levels before potential losses intensified.
Meanwhile, the 1 month-3 month group spent approximately $550 million. It is recorded that this group initially purchased between $26,000 and $42,000. So, they appear to have made a profit given the volatility of the market. Interestingly, movement in the 3-month-6-month group remained relatively stagnant. This suggests that they have had a relatively smaller reaction to the recent market turmoil.
Long-term holders’ (LTH) reaction
Interestingly, investors in the 6-month-12-month group, corresponding to those who entered the market in the first half of 2023, collectively sold $7.6 billion worth of BTC after the Bitcoin ETF news. This significant move indicates profit-taking, possibly spurred by concerns about a potential ongoing decline in the market.
In particular, it was recorded that there was minimal activity within the 1 year ~ 5 year group. Investors who weathered the storm of the 2019-2022 cycle demonstrated resilience despite the ups and downs of the market. Thus, it was relatively unaffected by the day’s price action.
Experienced investors kept their fixed positions!
Analysis of the SOAB indicator provides important insight into investor behavior and sentiment following the recent news regarding the Bitcoin ETF. Short-term investors had mixed reactions. Some exited to protect their capital, while others preferred to take profits. On the other hand, long-term investors reacted differently. While new entrants to the market preferred to take profits, more experienced investors maintained their fixed positions. CryptoQuant analyst Yonsei Dent rides the Bitcoin ETF wave
BTC fluctuated due to ETF news, but HODLers did not move. Yesterday’s price action doesn’t seem to have had much of an impact on investors enduring the 2019-2022 cycle.
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