Firstly, I would like to differentiate between a short term holder (trader) and a long term holder (Investor). A Long term holder is considered so when it holds it´s BTC for more than 160 days.
Long term holders historically buy bitcoin in the bear markets and sell just before and during the bull markets. The selling of long term holding positions have been a good signal of a commencing bull market as we can see from the image below.
This could be hard to understand, but mainly realates to the long term positions being usually bigger than the short term trading positions and being less time sensitive. These long term trades are placed when the market suffers "depression" and really low prices and are sold as soon as FOMO and greed kick in. It is true that FOMO normally rushes the price to insane levels, but also brings along a good amount of volatility, which is not a good habitat for big long term investments.
One could argue that these long term trades miss out on the big runs, but we must also acnowledge that for example a trade placed in BTC at s price level of 5K sold at between 30k would mean a 600% increase (a 500% gain). Note that no long term trader sells their entire BTC position.
These investors would now invest part of these gains in altcoins, stablecoins and other investments such as realstate and leave the BTC market in the hands of short term traders, which are driven by FOMO and auphoria and are the ones who pump the price to record prices, along with big volatility. Thus creating the perfect scenario for massive gains in short time frames.
As we can see from this graph (Updated up to december 15th ONLY!) we could see how the bull run form this past month could have been predicted as the signs of long term trades being shortened.
This idicator clearly signals a massive price explosion, accompained by big volatility, as part of the bull-run that has just started.
