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Bitcoin (BTC) speculators are leading a period of “exhaustion and apathy” across the market, new research says.

In the latest edition of its weekly newsletter, “The Week On-Chain,” analytics firm Glassnode waning conviction among Bitcoin’s short-term holders (STH).

Bitcoin speculators risk unrealized losses

After several months of stagnant BTC price action, frustration among market participants has lead to predictions of deeper downside to come.

Bulls remain unable to break resistance, while sellers likewise face multiple support zones in the form of trend lines between the current $29,000 and $25,000.

Among these is the STH cost basis, or realized price. STHs are defined by Glassnode as entities hodling coins for 155 days or less, and correspond to the more speculative end of the Bitcoin investor spectrum.

The STH cost basis has functioned as support throughout 2023, but it is rapidly rising, and currently sits at $28,600.

By contrast, the long-term holder (LTH) cost basis, which reflects the aggregate purchase price of the most stubborn hodlers, is far lower at $20,300.

“The separation between these two cost basis is an indicator that many recent buyers have a relatively elevated acquisition price,” Glassnode commented.

Continuing, researchers described the market as being potentially “top heavy,” with even a modest BTC price comedown now apt to send the STH cohort into the red.

“On a macro scale, this supply distribution does resembles similar periods during bear market recoveries in the past,” they reasoned.

“However, on a shorter timeframe, it could be argued to be a slightly top heavy market, with many price sensitive investors at risk of falling into an unrealized loss.”

Bitcoin Long/Short-Term On-chain Cost Basis annotated chart (screenshot). Source: Glassnode

Bitcoin hodler conviction still “impressively high”

Despite this, it appears that speculators have already started to reconsider their market exposure.

Related: BTC price can reach $34K as Bitcoin faces support ‘kiss’ — QCP Capital

The portion of the BTC supply under the control of STH entities has declined, while LTHs now control a larger chunk than ever before.

“We note that the the supply held by Long-Term Holders continues to increase, hitting an ATH of 14.6M BTC. In direct contrast, Short-Term Holder supply has declined to multi-year low of 2.56M BTC,” “The Week On-Chain” added.

“Overall, this suggests that conviction of Bitcoin investors does remain impressively high, and very few are willing to liquidate their holdings.”

The last time that STHs had such little market presence was in October 2021, just before BTC/USD hit its current all-time high of $69,000.

Bitcoin Long/Short-Term Holder Threshold chart. Source: Glassnode

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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.