First Mover Asia: Bitcoin 'Minnows' Are Punching Above Their Weight Class; BTC Holds Around $41,500, APE Surges on Rumors

Prices: Bitcoin was higher for a third straight day, changing hands around $41,500. But the headiest (and most ridiculous) crypto-markets action was in ApeCoin.

Technician's take: There has been a loss of downside momentum on bitcoin's daily chart, which could keep short-term buyers active.

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Indecisiveness ruled markets Wednesday as bitcoin flipped between gains and losses on the day and U.S. stocks ended the session mixed.

One thing that was clear was that ApeCoin (APE) was pumping, though even that move was panned as ridiculous, entirely speculative and based on unconfirmed tweets.

Bitcoin was holding near the $41,500 price level after a three-day price increase of nearly $3,000. Analysts said that the largest cryptocurrency was benefiting from optimism that a spot bitcoin exchange-traded fund might win approval from the U.S. Securities and Exchange Commission.

“I don't think there's any one major catalyst for price movement up or down right now,” Jason Deane, bitcoin market analyst at Quantum Economics, told CoinDesk's Angelique Chen.

In traditional markets, the Standard & Poor's 500 Index of large U.S. stocks ended the day slightly down, while the Nasdaq Composite Index fell 1.2%; Netflix tumbled more than 30%. The U.S. 10-year Treasury yield slid 0.07 percentage point to 2.84%.

In other crypto news, the giant crypto exchange Binance unveiled its new Twitter emoji Wednesday, and soon took it down after users pointed out its resemblance to a swastika.

All the while, the number of wallets with a bitcoin balance of 100-1,000 declined, suggesting a selloff by larger holders.

According to a new report from Glassnode, these "minnows" also have a fierce appetite for pain and are hodling their crypto through some intense volatility and price compression even though their coins have yet to experience a breakout.

For its part, Glassnode is defining long-term holders as those who bought before bitcoin’s all-time high In October 2021, while anyone who bought after that date is considered a short-term holder.

Glassnode points to a massive selloff by those who bought at the top (short-term holders) at around $50K-$60K.

“What we can see is that the recent correction pushed a historically significant volume of LTH coins into an unrealised loss. This means that the amount of buying between August and November, which has now become underwater HODLing, is some of the most significant of all time,” Glassnode wrote.

Glassnode notes that investors that bought the top, those active between August 2021 and January 2022, have seen prices plunge beneath their cost basis and have dumped bitcoin causing a “large scale redistribution of the bitcoin supply to new hands.”

At the same time, Glassnode observes that those that purchased bitcoin in the last week of January — the minnows — are still hodling.

“Much of the volume profile from 22-Jan remains intact. Despite an additional 2.5 months of sideways consolidation, a large proportion of the market appears unwilling to spend and sell their coins, even if their coins are held at a loss,” Glassnode wrote.

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