Crypto market set for months of accumulation: Glassnode

The "last flush" of sellers, indicated by a recent rise in short-term Bitcoin (BTC) holdings, shows that capitulation events have concluded and the market is now set for months of accumulation, according to an on-chain report by blockchain analytics firm Glassnode.

STH increase position by 330,000 BTC

According to the recent "The Week On Chain" report, Since the disastrous Terra collapse in May, short-term holders (STHs) have increased their holdings by 330,000 BTC, indicating the direction of a market rebound.

Short-term Bitcoin holders have started a new trend by buying extremely inexpensive coins at or around $20,000 during the large sell-offs that began in May through June, putting them in an "advantageous financial position."

According to the analysis, exchange net outflows since May and an outflow of roughly 200,000 coins from long-term holders (LTHs) appears to have been the major causes of the rising STH supply.

All of these things point to a capitulation, and STHs "stepped in during the flush out, and now possess coins with a substantially reduced cost base," according to the report.

Wallets that have only held Bitcoin for 154 days or less are known as STHs. They reach LTH status at 155 days.

Since "extreme STH accumulation is typically contemporaneous with bull market topping forms," STHs typically buy coins at or close to all-time high prices and sell them for significantly less.

Constructive divergence seen

Glassnode said that purchasers were defying this tendency from May and June, which produced a "constructive divergence."

Such events, it continued, "describe a transfer of coins to new purchasers who are initially categorized as STHs, but have a low-cost base, and are in a favorable financial position to HODL from then on."

Experts must consider conviction to hang on

Whether the new STHs from May and June "have the conviction to hang on" and contribute to future price hikes is the next part of a market reversal that experts must consider.