Although Bitcoin pulled back from its all-time high over the weekend, on-chain data suggests that short-term holding is on the rise.
The digital asset reached a new all-time high of $49,580 on Sunday, February 14. However, Bitcoin plunged by nearly 7% to trade in the $46k region by Monday. As of press time, Bitcoin had bounced back slightly and was exchanging hands for $47,900. The top cryptocurrency is still in danger of falling to lower prices if current support levels fail.
Commenting on Bitcoin’s drop, Ari Paul, CIO Blocktower Capital, opined that Bitcoin is still at the center of a “violent bull run” but he is speculating a “brief and minor correction.”
We're probably entering (I think) a brief and minor correction now, but we're still in the midst of a violent bull run that will soon be more violent. Here's a thread on psychology and health.
— Ari Paul ⛓️ (@AriDavidPaul) February 15, 2021
Meanwhile, on-chain analytics provider Glassnode reported that while previous bull markets were characterized with certain markers such as miner outflows, such markers are yet to fully emerge in the current Bull Run. As such, the bulls may still be in charge.
Previous #Bitcoin bull markets are characterized by fingerprints of increased miner outflows of $BTC that had been acquired throughout prior years.
— glassnode (@glassnode) February 14, 2021
Even though we're seeing slightly higher outflows of older BTC, this same pattern has not emerged in the current bull market. pic.twitter.com/XdaZvNIz38
The data provider also pointed to another interesting fact. Compared to long-term holders, the number of short-term holders has been growing significantly. This was one of the characteristics of the market in July 2017.
Overall, it is not unusual for the crypto market to pullback after a sustained bull run.