Bitcoin volatility intensified in the second week of January, with the price dropping 6.25% from January 6th to January 12th, from $96,960 to $90,900. Although this is still consistent with the drawdown you would expect during a bull cycle, this decline provides an excellent case study for analyzing market behavior.
Observing changes in realized prices through the age distribution of UTXOs can help us clearly understand which addresses accumulated BTC during this period.
The latest UTXO (0-1 days) showed a 6.31% decline in realized price, roughly matching the overall market decline. This match indicates that buyers are facing immediate pressure these days, and many may be underwater.
The 1-day to 1-week band showed more resilience with an increase of only 0.48%, while the 1-week to 1-month band recorded a minimal decline of 0.88%. This pattern suggests that the newest market participants are feeling the pain, while slightly older positions are stabilizing.
The largest change in realized price was seen in the 1-3 month range, with an increase of 5.44% despite the market downturn. This divergence suggests significant accumulation by “intermediate-term holders” who likely viewed this decline as a solid buying opportunity.
The 3-6 month and 6-12 month bands showed stability with small increases of 0.24% and 0.41%, respectively, indicating strong confidence and lack of activity among these cohorts.
Long-term holders exhibited mixed behavior. The 12-18 month band showed a significant increase of 2.31%, while the 2-3 year band experienced a decrease of 0.86%. The 3-5 year band remains relatively stable at 0.40%, suggesting that these veteran holders are largely unfazed by the current market volatility.
If we look at the change in realized price over the past 30 days, we can see an even more significant change in holder behavior. During this period, the price of Bitcoin decreased by 12.94% from $104,409 to $90,903. However, some UTXO age bands have seen significant growth in realized prices.
The biggest changes were in the 7-10 year band, which increased by 43.81%, and in the 1-3 month band, which increased by 32.53%. The dramatic divergence between price action and realized prices in these bands indicates substantial accumulation by both very long-term holders and strategic medium-term investors.
In particular, the 5-7 year band showed a decline of 9.54%, suggesting profit-taking from this cohort. This is in contrast to the behavior of the 7-10 year band, which shows different strategies among long-term holders, with the most experienced participants displaying the strongest beliefs.
Despite the overall price decline, the significant increase in realized prices for the 1-3 month and 7-10 year bands has led to strong gains from both strategic medium-term investors and seasoned holders despite the price decline. This indicates that there is considerable buying pressure. The divergence in behavior between 5-7 year holders and 7-10 year holders suggests a nuanced market where even long-term holders have different strategies and price targets.
This analysis suggests that the market is dominated by strong hands that accumulate during price declines, with short-term holders experiencing pressure. These patterns historically suggest a potentially strong foundation for future price movements as the coin transitions from weak to strong hands. However, continued pressure on short-term holders is likely to further increase short-term volatility before this accumulation behavior leads to higher prices.
The article “Fresh Addresses Accumulate Bitcoin Despite Heavy Price Drop” appeared first on CryptoSlate.
