Blockchain analytics firm Glassnode is unveiling Bitcoin’s on-chain activity amid the “Elon Dip,” which ignited a market-wide sell-off following the Tesla chief’s comments on BTC’s energy consumption.
In their weekly letter, Glassnode pinpoints the group of investors who are parting with their Bitcoin as the leading crypto asset continues to slide.
“Elon’s tweets range from claims of negative externalities from energy consumption, to claims that 10x faster and larger blocks on Dogecoin are a viable alternative. Unfortunately, this has lead to widespread confusion in markets, although for many Bitcoin HODLers, this is just another day in the office.
On-chain we can observe a notable bifurcation of reactions, with newer market entrants panic selling and realising losses, whilst long term hodlers appear relatively un-phased by the news. There are many supply and demand dynamics that resemble the 2017 macro top however with unique differences that will challenge the conviction of both bulls and bears.”
The analytics firm also notes that the amount of coins being sold at a loss have hit levels that usually mark the bottom.
According to Glassnode, another indication that new market participants are panic selling is the clear downtrend of “non-zero” BTC addresses or addresses with a BTC balance above zero.
“The total count of addresses holding a non-zero BTC balance has also pulled back by -2.8% from the recent all time high of 38.7M addresses. A total of 1.1M addresses have spent all coins they held during this correction, again providing evidence that panic selling is currently underway.”
Glassnode says that as new entrants panic sell, long-term holders appear to be buying the dip and accumulating more BTC.
“Overall, the Bitcoin market is in a historically significant correction. There are strong signals that short-term holders are leading with panic selling. However, long-term holders are stepping in to buy the dip and their confidence is largely unshaken. The PoW (proof of work) energy consumption narrative is nuanced to say the least, and what follows will be a test for the whole Bitcoin market’s conviction.”