On-chain data shows that the trend among long-term Bitcoin holders has recently reversed, as their supply has absorbed $8 billion worth of tokens.
Bitcoin HODLers Have Returned to Net Accumulation
As explained by CryptoQuant author Axel Adler Jr in a after on X, long-term holders have recently increased their supply. The “long term holders(LTHs) here refer to the Bitcoin investors who have held their coins for more than 155 days.
These holders form one of the two main divisions of the BTC market based on holding time, with the other cohort known as the “short term holders” (STHs).
Statistically, the longer an investor holds on to their coins, the less likely they are to sell them. So LTHs, which tend to hold for a long time, represent the stubborn side of the market.
In general, this group does not sell easily, even during rallies or crashes, unlike the STHs. Still, this year’s rally was too good a profit-taking opportunity for even the diamond hands to pass up.
As the chart below shared by the analyst shows, Bitcoin LTHs have increased their aggregate supply during the rally to the new all-time high price (ATH).
Looks like the value of the metric has been on the rise in recent weeks | Source: @AxelAdlerJr on X
Bitcoin HODLers slowed their sell-off briefly after the price dropped, but they still engaged in one final round of sharp selling as BTC saw a recovery to $68,000.
LTH supply dropped to 14,431,517 BTC following this sell-off, but holders have since reversed their behavior. The chart shows that the metric has now risen to 14,557,609 BTC, suggesting an increase of 126,092 BTC, which is worth a whopping $8.1 billion at the current exchange rate.
One thing to remember though is that when LTH inventory registers a surge, it doesn’t mean that these diamond hands are buying right now. Rather, the surge suggests that some buying occurred five months ago and those coins have matured enough to be part of this group.
Of course, the same principle does not apply to sales. The age of coins is reset to zero immediately when they are moved on the Bitcoin blockchain. They are then immediately removed from the LTH supply.
The recent renewal of the uptrend in the indicator could be a sign that the diamond hands are done selling and are now HODLing again. If this is indeed the case, then the trend could of course be a bullish sign for cryptocurrency.
BTC price
The past day has been bearish for Bitcoin as the price has dropped by over 3% and is now hovering around the $64,600 level. The chart below shows what the asset’s recent performance has looked like.
The price of the coin appears to have been going down over the last few days | Source: BTCUSD on TradingView
Main image from Dall-E, CryptoQuant.com, chart from TradingView.com