On-Chain Data: Top Buyers Almost Surrender, Bitcoin HODLer Dominates Market

Global markets are facing a very sobering week as armed conflict erupts between Russia and Ukraine. As a global macro asset, and because the market never "closes," the price of Bitcoin has seen a lot of volatility. Markets traded as low as $34,474 last week before quickly recovering to $39,917.

Now down 138 days from the November ATH, the confidence of many Bitcoin investors, mostly those who bought near the top, has been significantly challenged this week. In this issue, we'll take a look at which buyers will flock and compare the current market structure to the May-July 2021 period.

What we have observed is that the top buyers have now almost completely capitulated. However, the remaining distribution of holders appears to have a higher determination, arguably reflecting the unwavering belief of the buyer of last resort: Bitcoin HODLers.

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We’ll start with an in-depth analysis starting with the URPD indicator, which shows the price at which the token supply distribution was last moved on-chain. What we want to explore here is how investors behave during this drawdown and how they behave during similar drawdowns in May-July 2021.

We will analyze the URPD metrics from four dates:

May 10, 2021, before the massive sell-off liquidation event
July 20, 2021, rally to pre-ATH lows of $29,000 by the end of 2021
November 9, 2021, when the market was at an all-time high
February 27, 2022, at the time of writing
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market

From the May-July period, the distribution of tokens is skewed to be very top-heavy, with most tokens having a supply between $54,000 and $60,000. While this suggests some level of demand at higher prices, it also makes the market vulnerable, with many of these "top buyers" sensitive to any major price corrections.