Bitcoin has experienced consecutive declines of 3.7% over the past two days as tensions in the Middle East have heightened. This comes as Iran launched a ballistic missile attack on Israel, causing concern among investors. Despite this, Bitcoin has remained relatively stable, marking the worst start to October in its history.
One factor contributing to the recent price movements is the behavior of short-term holders, who are defined as investors holding Bitcoin for less than 155 days. This group tends to panic-sell when the price drops below their initial investment. Data from Glassnode shows that short-term holders have sent approximately 64,000 Bitcoin to exchanges in the last two days, amounting to $4 billion. Of this, $3 billion was sent at a loss, indicating that these holders sold when the price was below their average acquisition cost.
In contrast, long-term holders have remained steady, with only 100 Bitcoin being sent to exchanges at a loss during the same period. This suggests that long-term holders have confidence in the future of Bitcoin and are not swayed by short-term price fluctuations.
The recent spike in outflows to exchanges by short-term holders is the highest since August 5, when $2.5 billion in losses were sent in a single day. This indicates a level of uncertainty and fear in the market, particularly among those who have recently acquired Bitcoin.
Overall, the geopolitical tensions in the Middle East have added another layer of complexity to the already volatile cryptocurrency market. Investors will be closely watching how Bitcoin responds to these events in the coming days and weeks. As always, it is important for investors to remain informed and make decisions based on their own risk tolerance and investment goals.