Data shows that the Bitcoin HODLer balance has registered a decline of around 9.8% during this bull run. Here’s what this figure looked like for previous cycles.
Bitcoin HODLers have seen their holdings plummet recently
This is evident from data from the market information platform InTheBlokBitcoin’s long-term holders have been gradually reducing their overall balances lately.
The “long term holders” (LTHs) here refer to the BTC investors who hold their coins for at least a year, without transferring or selling them once.
Statistically, the longer a holder holds their coins, the less likely they are to sell the tokens at any time. As such, the LTHs, which persist for longer periods, can be considered persistent entities. The weak-handed side of the market is known as the “short-term holders” (STHs).
Here is the chart shared by IntoTheBlock showing the trend in combined holdings of the Bitcoin LTHs over the past decade:
The value of the metric appears to have been on the decline in recent months | Source: IntoTheBlock on X
The chart above shows that Bitcoin LTHs have reduced their supply this year. More specifically, the total balance of these HOLDers has fallen by approximately 9.8% during this downtrend.
The LTHs have decided to break their dormancy as soon as this metric registers a decline. Generally this happens because they want to participate in a particular sale.
Something to note is that while selling is something that can immediately appear on the indicator, the same is not true for buying. There is a one-year lag associated with LTH supply in this regard, as coins cannot become part of the cohort until they have been held for at least a year.
As mentioned earlier, LTHs tend to be dedicated hands, so they don’t sell too often. That said, even these investors are forced to sell when the profits from a major Bitcoin bull run roll in.
The analytics firm has highlighted in the chart what these sales looked like during previous cycles. It appears that the rate of decline in this cycle so far has been less than during the last bull markets.
“Long-term holders’ balances are down 9.8% this cycle, compared to 15% in 2021 and 26% in 2017,” IntoTheBlock notes. So it is possible that the HODLer distribution has more room to continue before the Bitcoin rally ends.
In other news, as CryptoQuant community analyst Maartunn pointed out in an X afterthe total Open interest as the cryptocurrency sector has rocketed to a new all-time high of $79.2 billion.
Looks like the value of the metric has observed a sharp surge recently | Source: @JA_Maartun on X
The “Open Interest” refers to a measure of the number of derivatives positions that users have opened on all centralized exchanges. A spike in this indicator usually corresponds to higher volatility in the market.
BTC price
The Bitcoin rally has gone cold as the price has been consolidating sideways around $95,800 lately.
The price of the coin has been stuck in sideways movement over the last few weeks | Source: BTCUSDT on TradingView
Featured image from Dall-E, IntoTheBlock.com, chart from TradingView.com