According to data, most Bitcoin owners who are mid-to long-term holders sold their Bitcoin during November. This is responsible for the correction.
The Bitcoin UTXO Age shows that mid-term holders sold their coins in November
As per the latest weekly report from Arcane Research, mid-term holders seem to be behind the decline in BTC’s price during the month of November.
The relevant on-chain indicator here is the “UTXO Age.” UTXO stands for Unspent Transaction Output; you can think of it as a Bitcoin mechanic that keeps track of coins on the chain.
The UTXO-age metric is a measure of how long ago a BTC coin was last traded. Based on the amount of time each coin hasn’t been moved for, the corresponding holders can be categorized into short-term holder (STH), mid-term holder (MTH), and long-term holder (LTH).
Arcane Research considers UTXO ages shorter than 3 months to be STH and longer than 1 year LTH. Holders that fall within this period are known as MTH.
This chart shows the movement of the Bitcoin supply during November.
It looks like there is a reduction in the supply of mid-term supplies over the course the month. Source: The Arcane Research Weekly update - Week 47| Source: The Arcane Research Weekly Update - Week 47
You can see that Bitcoin’s short-term supply went through significant growth in this period. It increased from 14.9% to 17.2% by the end of the month.
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This suggests that holders of coins older than 50 years may have sold their coins. From the chart, it’s visible that the MTH supply had a sizeable drop during the month.
This is because most of Bitcoin STH’s increase can be explained by mid-term sellers.
The one-to three year supply also saw an increase. It means that a portion of the MTH supplies matured and moved into the longer age bracket.
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There was also a decrease in the supply for the next 3-5 years in November. It is possible that these long-term investors reaped their gains and added to STH’s increase.
This suggests that November’s correction may have come from selling from mostly short-term investors with some longer-term ones.
At the time of writing, Bitcoin’s price floats around $55.5k, up 2% in the last seven days. In the past month, crypto lost 11% value.
Below chart displays the five-day trend of Bitcoin’s prices.
BTC has been moving sideways over the past few days. Source: BTCUSD at TradingView| Source: BTCUSD on TradingView
Unsplash.com featured image, Charts from TradingView.com and Arcane Research charts