On-chain data shows that Bitcoin’s supply to long-term holders has continued to decline recently. Here’s what that could mean for the asset.
Bitcoin’s 30-day supply change for long-term holders has recently been negative
As CryptoQuant author Axel Adler Jr. explained. In fasting on X, the supply of long-term BTC holders has shown no signs of increasing recently. “Long-term holders” (LTH) refer to Bitcoin investors who have held their coins for more than 155 days.
LTHs are one of the two main divisions of the BTC market based on holding time, with the remaining groups being known as “short-term holders” (STH).
Statistically, the longer an investor holds their coins, the less likely they are to sell them at any time. As such, LTHs are considered the bullish part of the sector, while STHs include investors with fickle views.
Despite its resilience, Bitcoin LTH has been involved in a sell-off recently. Below is a chart showing the trend of the total supply held by these HODLers and its 30-day change over the past decade.
The value of the metric seems to have been negative in recent weeks | Source: @AxelAdlerJr on X
The chart above shows that the supply of Bitcoin LTH has declined since spot funds (ETFs) received approval from the U.S. Securities and Exchange Commission (SEC) in January.
It is clear from the 30-day change chart that the decline in the indicator was sharpest when the price rose towards a modern all-time high (ATH).
These diamond hands hold their coins for a long time and tend to accumulate immense profits. The timing of the sell-off would indicate that these profits increased so much during the rally that even these diamond players succumbed to the temptation to take profits.
Despite the bearish price action that the cryptocurrency has been going through recently, the indicator continues to decline, although the decline is much less steep.
The continued decline is even more engaging because the spot ETF approval trigger is older than 155 days. It appears that any purchases from HODLers that occurred during that time are now being offset by fresh sales from older members of the cohort.
Axel notes that the lack of growth in LTH supply may suggest market-wide pessimism. As the chart shows, this is not modern in this cycle.
It appears that Bitcoin LTH has also participated in sell-offs in the middle of the last two bull runs. So the recent distribution from LTH is not necessarily a bad sign in the long run.
BTC price
At the time of writing, Bitcoin is trading at around $61,200, down over 4% over the past week.
Looks like the price of the coin has been going down over the last few days | Source: BTCUSD on TradingView
Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com
