Recent Bitcoin investors are exiting the market as prices stagnate. This trend is evident in the latest downturn. Novice investors are not familiar with market traditions and sentiments, so they are selling the dip instead of buying it.
On-chain data shows significant selling from investors who entered the market this year, now, as the price fell to $55,000 on Friday, they panic and succumb to the wish to exit.
CryptoQuant analyst Cauê Oliveira reported major network activity. "$2.4 billion worth of Bitcoin aged between three and six months moved during the drop," he wrote.
This data supports a theory among analysts. Recently acquired coins are more likely to move during price fluctuations.
Oliveira explained these sellers' behavior. "They can be classified as 'long-term' holders, but are possibly behaving like short-term investors."
Many buyers likely entered during the Bitcoin spot ETF launch in January. These funds saw $13 billion in net inflows initially.
ETF performance and Bitcoin prices have since plateaued. This has led to investor disappointment. Especially if we are talking of rookie investors, not familiar with previous Bitcoin market cycles, bull runs and candles.
Longer-term holders show more resilience. Oliveira noted that entities "older than one year" haven't shown heavy selling.
LookIntoBitcoin data provides context. The short-term holder realized price is $64,614, 10% above the current market price.
This figure represents the average purchase price for recent entrants. It may indicate a threshold for panic selling among new Bitcoin investors.