On-chain data shows that short-term investors’ Bitcoin holdings have recently declined at the fastest pace since 2012.
Bitcoin Short-Term Holder Supply Drops as Investors HODL
As explained by CryptoQuant author Axel Adler Jr in a new after On X, the 30-day change in short-term inventory supply has recently fallen deep into negative territory.
The “short term holders” (STHs) are the Bitcoin investors who have purchased their coins in the last 155 days. This group is one of the two major segments of the BTC market, divided based on holding time, with the other group known as the “long term holders” (LTHs).
Statistically, the longer an investor holds on to their coins, the less likely they are to sell them at any point. So, STHs can be considered the volatile side of the sector, while LTHs are the stubborn ones.
One way to track the behavior of these groups is through the total amount of Bitcoin they currently hold in their wallets. Below is the chart the analyst shared, which shows the 30-day change in the supply held by STHs specifically.
The value of the metric appears to have plummeted in recent days | Source: @AxelAdlerJr on X
As shown in the chart above, the 30-day change of Bitcoin STH stock had witnessed a sharp positive spike earlier this year as the rally towards the new record (ATH) had occurred.
This suggests that there has been a massive transfer of supply from LTHs to STHs. The chart shows that this is not unusual for a bull rally, as LTHs historically tend to take some of their HODLing profits when the asset has reached new highs.
The sales of these diamond hands during such periods are met by the new demand that comes into the market after being swept up in the hype of the rally.
Since Bitcoin dropped to its consolidation, LTHs seem to have calmed down their selling. Not only that, the trend seems to have completely reversed recently as the 30-day change of STH supply has dived into the negative region.
Over the past month, STH supply has decreased by around 15%, the lowest 30-day change since 2012, when the cryptocurrency was still in its infancy.
Of course, this means that LTH supply has actually increased. Something to keep in mind, however, is that this trend does not mean that LTHs are “buying” these tokens from STHs.
Rather, what is happening is that the STHs are “maturing” in the cohort, having crossed the 155-day mark. So it seems that even the STHs have been content to be patient during this period of consolidation. This increase in HODLing sentiment could of course be a positive sign for Bitcoin.
BTC price
At the time of writing, Bitcoin’s price is hovering around $59,500, up about 5% over the past seven days.
Looks like the price of the coin has gone down over the last 24 hours | Source: BTCUSDT on TradingView
Main image from Dall-E, CryptoQuant.com, chart from TradingView.com