The on-chain analytics firm Glassnode has explained how Bitcoin investor behavior tends to reflect in price trend reversals and continuations.<\/p>\n
In a new thread<\/a> on X, Glassnode has shared a new way to categorize Bitcoin investors based on their on-chain spending patterns. Under this indicator, called the Supply by Investor Behavior, there are five cohorts: Conviction Buyers, First Buyers, Momentum Buyers, Loss Sellers, and Profit Takers.<\/p>\n First Buyers, Loss Sellers, and Profit Takers are pretty self-explanatory. Conviction Buyers refer to the investors who buy despite a decline in the cryptocurrency\u2019s price, while Momentum Buyers refer to those who buy during uptrends.<\/p>\n \u201cThe metric tracks the cumulative token supply held by each cohort over time,\u201d notes the analytics firm in the chart\u2019s description on its website. \u201cTo focus solely on investor behavior, we exclude exchanges and smart contracts.\u201d<\/p>\n Here is the chart shared by Glassnode that shows the trend in the indicator over Bitcoin\u2019s history:<\/p>\n To showcase how the behavior of these groups has an effect on the asset\u2019s trajectory, the analytics firm has zoomed in on the data of two cohorts: Conviction Buyers and First Buyers.<\/p>\n First, here is the chart specifically for the Bitcoin Conviction Buyers:<\/p>\n From the graph, it\u2019s visible that the BTC supply held by the Conviction Buyers generally observes a spike alongside inflection points in the cryptocurrency\u2019s price. In particular, their supply tends to reach a peak coinciding with bear market<\/a> lows. These investors also step in to buy dips during uptrends, helping stabilize pullbacks.<\/p>\n \u201cBut conviction alone isn\u2019t enough to spark a rally \u2013 that\u2019s where First Buyers come in,\u201d explains Glassnode. Below is a chart that highlights the role of the First Buyers.<\/p>\n As displayed in the chart, demand from First Buyers went up alongside Bitcoin\u2019s recovery out of the bear market, with a particularly sharp surge coinciding with the bull rally in Q1 2024.<\/p>\n The supply of the First Buyers let off during the consolidation<\/a> phase that followed this rally, but demand returned in the second half of the year, helping fuel the run beyond $100,000.<\/p>\n The Bitcoin market downturn this year again accompanied a decline in the supply of the First Buyers, this time to a much stronger degree than last year\u2019s drawdown. New capital inflows seem to have made a sharp return once more, however, as the metric\u2019s value has switched to rapid growth, potentially explaining the rally to the new all-time high<\/a>.<\/p>\n At the time of writing, Bitcoin is trading around $109,800, up over 4% in the past week.<\/p>","protected":false},"excerpt":{"rendered":" The on-chain analytics firm Glassnode has explained how Bitcoin investor behavior tends to reflect in price trend reversals and continuations. Glassnode Highlights Key Behavioral Patterns Behind Bitcoin Moves In a new thread on X, Glassnode has shared a new way to categorize Bitcoin investors based on their on-chain spending patterns. Under this indicator, called the […]<\/p>\n","protected":false},"author":0,"featured_media":69633,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-69632","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-discovery"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/69632"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=69632"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/69632\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/media\/69633"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=69632"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=69632"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=69632"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}BTC Price<\/h2>\n