Investor sentiment is uncertain, but Bitcoin holding trends resurface during market crash

As the market experiences its biggest decline of this cycle, investor sentiment in the digital asset market remains uncertain.

Beneath the surface, however, Glassnode has found there are clear signs of a resurgence in HODLing and accumulation.

Signs of accumulation

from Glassnode analysis The response of on-chain investors to these volatile market conditions indicates a growing inclination to hold cryptocurrencies in the market. Since the price of Bitcoin reached an all-time high in March, the market experienced a prolonged phase of supply distribution involving wallets of varying sizes.

However, in recent weeks, this trend has begun to reverse, especially among larger portfolios, often linked to ETFs. This group of investors appears to be returning to an accumulation phase.

Glassnode’s Accumulation Trend Score (ATS) metric, which assesses a weighted balance shift across the market, also suggests a shift towards accumulation-focused behavior. This renewed focus on accumulation has led the ATS to reach its all-time high value of 1.0, indicating substantial accumulation over the past month.

Long-term holders (LTH) had largely divested during the run-up to the all-time high. This cohort has now returned to HODLing, with a total volume of +374k BTC migrating to LTH status over the past three months. From this, Glassnode deduced that “investors’ propensity to hold their coins is now a greater force relative to their spending pressures.”

“We can see substantial LTH distribution, typical of macro top formations, at the March ATH. Less than 1.7% of trading days have seen major distribution pressure. More recently, this metric has returned to positive territory, indicating that the LTH cohort is expressing a preference to hold their coins.”

When does the rebound occur?

The active investor cost basis is a crucial threshold that helps determine whether investors are optimistic or pessimistic about the market. Since the market has remained stable around this point, Glassnode claimed that this shows that there is some strength and that investors still expect the market to improve in the near future.

The report also suggests that Bitcoin’s failure to break above the $70,000 mark may be partly due to a drop in current buying interest, meaning a negative Adjusted Spot CVD. However, if buying interest improves and the Adjusted Spot CVD metric turns positive again, it could signal a potential rebound in demand.