Over the past couple of days, from September 30 to October 1, Bitcoin (BTC) saw consecutive declines of 3.7% due to rising geopolitical tensions in the Middle East, specifically Iran’s ballistic missile attack on Israel. This drop made the start of October one of the worst in Bitcoin’s history, even though the month has traditionally brought positive returns.

A significant factor behind this decline involves the behavior of short-term holders. According to Glassnode, an analytics firm, short-term holders are those who have held Bitcoin for less than 155 days, and they are more likely to panic sell when the price falls below what they originally paid. Since September 19, this group of investors bought around 100,000 BTC while the price climbed from $62,000 to over $66,000 by September 27. However, as the price started to fall again, these investors began selling off their Bitcoin.

In the past two days, short-term holders have sent about 64,000 BTC (worth around $4 billion) to exchanges, and about $3 billion of that was sold at a loss, meaning they sold at a price lower than what they originally paid. This is the highest amount of Bitcoin sent to exchanges at a loss by short-term holders since August 5, when the market saw $2.5 billion in losses in a single day due to the yen carry trade unwind.

On the other hand, long-term holders, who generally have a more patient approach to market fluctuations, have remained mostly calm during this period. As a group, they only sent 100 BTC to exchanges at a loss, showing that they’re holding onto their investments despite the recent volatility. This difference in behavior highlights the contrasting strategies between short-term and long-term Bitcoin holders during times of uncertainty in the market.

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