On-chain data shows the supply of bitcoin held by short-term holders recently fell at the fastest monthly rate since 2012.
Bitcoin Supply for Brief-Term Holders Falls Precipitously as Investors HODL
As CryptoQuant author Axel Adler Jr. explains in a fresh book fasting in the case of X, the 30-day change in the supply of short-term bonds has recently fallen well below zero.
“Short-term holders” (STH) are Bitcoin investors who have purchased their coins within the last 155 days. This group is one of the two main segments of the BTC market divided based on holding time, while the other group is known as “long-term holders” (LTH).
Statistically speaking, the longer an investor holds their coins, the less likely they are to sell them. So STH can be considered part of a capricious sector, while LTH is bullish.
One way to track the behavior of these groups is the total amount of Bitcoin they currently hold in their wallets. Below is a chart provided by the analyst that shows the 30-day change in the supply held specifically by STH.
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 in Bitcoin STH supply saw a edged boost at the beginning of the year when it surged towards a fresh all-time high (ATH).
This suggests that there has been a massive transfer of supply from LTH to STH. The chart shows that this is not unusual in a bull market, as LTH has historically tended to take some of the profits from HODLing when the asset reaches fresh highs.
Sales of these diamond hands during such periods are absorbed by fresh demand entering the market after it has been caught up in the hype of rising prices.
As Bitcoin has fallen into its consolidation, LTH seems to be calming down its selling. Not only that, the trend seems to have completely reversed recently, as STH’s 30-day supply change has fallen into negative territory.
Over the past month, the supply of STH has fallen by about 15%, which is the lowest 30-day change recorded since 2012, when the cryptocurrency was still in its infancy.
Naturally, this means that the supply of LTH has increased. However, it is significant to note that this trend does not mean that LTHs are “buying” these tokens from the hands of STHs.
Instead, what’s happening is that STHs are “mature” into a cohort, after crossing the 155-day cutoff. So it looks like even STHs were joyful to be patient during this period of consolidation. This boost in HODLing sentiment could naturally 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
Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com
