Bitcoin markets recently experienced two major liquidation events, causing a cascade of forced selling from over-leveraged traders, but analysts say a distinct pattern has emerged.
“Overleveraged short-term traders were flushed out, long-term holders have been quietly capitalizing on the reset,” CryptoQuant analyst Amr Taha said on May 26.
They noted the first flush occurred when Bitcoin (BTC) fell below $111,000, and over $97 million in long positions were liquidated. As its price broke $109,000, another $88 million in longs were wiped out in the second wave.
However, as short-term traders faced margin calls and forced selling, long-term holders (LTH) responded very differently and increased their accumulation.
This caused the long-term holder realized capitalization to surge past $28 billion, a level not seen since April. Realized cap is a measure of the value of each Bitcoin based on the last time it was moved, rather than the current market