Lecture: Decoding the Enigma of Bitcoin Diamonds: A Glassnode Deep Dive

• Since the March peak of $73,794, Bitcoin has been sailing in calm seas, without major oscillations.
• In early May, the winds of demand shifted direction, signaling the possibility of a bearish storm.
• Short-term holders (STHs), like sailors on a ship in turmoil, recorded significant capital outflows.

• Despite representing only a small fraction of daily on-chain volume (between 4% and 8%), LTHs are the guardians of 30% to 40% of accumulated profits during bull markets, demonstrating their strength and resilience.
• This concentration of wealth in older coins, like precious diamonds polished by time, reveals the gradual return for long-term holders.
• Glassnode emphasizes: "This finding underscores the concentration of wealth in older coins gradually returning to diamond hands during bull markets."

• Glassnode proposes an innovative methodology to monitor demand, using the cost basis of different age groups within the STH cohort, as if mapping the sea currents that influence navigation.
• This groundbreaking approach identifies the capital flows entering and exiting the market, providing valuable insights into investor behavior during different market phases, like a beacon guiding sailors.
• Glassnode's data suggests that the current market structure, with spot prices below cost basis levels, historically leads to a deterioration of investor confidence, like dark clouds on the horizon.
• The study details: "Since mid-June, the spot price has fallen below the cost basis of both 1-week to 1-month holders ($68.5k) and 1-month to 3-month holders ($66.4k)."
• "If this structure persists, historically it has resulted in a deterioration of investor confidence and risks that this correction will be deeper and take longer to recover," like a storm that could drag on.

• Glassnode analyzes LTH behavior across different market phases, like a scholar observing the habits of wild animals.
• The study highlights the increased frequency of high-spending days by LTHs during bull market euphoria, as if they were sharing their treasures during a festival.
• "This highlights the relatively consistent behavioral pattern of long-term investors taking profits during periods of rapid price appreciation," the report concludes, like a beacon illuminating the way.

• This lecture provides information only and does not constitute financial advice.
• Do your own research before making investment decisions.
• Navigate cautiously and responsibly through the Bitcoin seas!