Bitcoin long-term holders aged between 5 to 7 years old have lost $6.4 billion in Realized Cap over the past year, but selling isn’t behind the fall.
In a new post on X, on-chain analytics firm Glassnode has talked about how the Realized Cap associated with the 5 to 7 years old Bitcoin investors has changed over the past year.
The “Realized Cap” here refers to an indicator that basically measures the amount of capital that the investors of the cryptocurrency have put into it. As such, changes in the metric correspond to the exit or entry of capital into the network.
In the context of the current topic, the Realized Cap of the whole market isn’t of interest, but rather that of a few specific investor segments. These are the holders with 5 to 7 years old, 7 to 10 years old and 10+ years old tokens.
Statistically, the longer an investor holds onto their coins, the less likely they become to sell them in the future, so these groups with their extremely long holding times would correspond to some of the most resolute hands in the sector. What the behavior of these investors is like, therefore, can be something to watch for.
Below is a chart showing the trend in the Realized Cap for these Bitcoin groups.
As displayed in the above graph, the Realized Cap associated with the youngest of these groups, the addresses holding coins aged between 5 and 7 years old, has seen a steep drop over the past year. The metric started out the window at a level of $14.9 billion, but today, it stands at just $8.5 billion, reflecting a decline of almost 43%.
Investor groups classified based on age lose Realized Cap when they break their dormancy and participate in transactions. For example, as soon as a holder part of the 5 to 7 years old segment shifts their coins, the age of said tokens resets back to zero, and they along with their Realized Cap share get kicked out of the group.
There’s one more way for the metric to decline for a cohort, however: upward promotion. This happens when an investor HODLs past the upper bound of the group’s age range.
From the chart, it’s visible that the combined Realized Cap associated with the 5 to 7 years, 7 to 10 years, and 10+ years segments has actually gone up over the past year, despite the first of them noting a steep drop in its metric. Since capital can’t directly transfer to the latter two groups, it must have gone through the former.
In other words, almost all of the “selling” that the 5 to 7 years group has participated in has actually corresponded to diamond hands holding steady enough to pass on to a higher cohort.
As Glassnode has pointed out, though, this doesn’t mean that the cohort hasn’t participated in any real selling at all. “The 5-7y group still spent ~385k $BTC in profit over the year, showing that while most coins matured passively, some holders selectively distributed,” notes the analytics firm.
At the time of writing, Bitcoin is trading around $112,400, up 3% over the past week.
