On-chain data shows that long-term Bitcoin holders have recently increased their dominance, which could indicate an augment in HODLing cases.
Bitcoin Supply for Long-Term Holders Is Rising Again
As CryptoQuant author Axel Adler Jr. explains in a modern book fasting on X, the number of long-term holders is growing again “Long-term holders” (LTH) here refers to Bitcoin investors who have been holding their coins for more than 155 days.
LTHs are one of the two main divisions of the BTC market based on holding time, the other group is referred to as “short-term holders” (STH).
Historically, LTHs have proven to be resistant to HODLs, not selling even when the market is undergoing major changes, such as a rally or crash. On the other hand, STHs are more likely to react to market events.
Below is a chart showing how the two groups’ dominance in terms of supply has changed over the past few years.
The value of the metric appears to have shot up in recent days | Source: @AxelAdlerJr on X
The chart shows that the supply share of Bitcoin-backed LTHs declined significantly at the start of the year, reaching a low of 78% at the time of the crash earlier this month.
This indicator has recently increased rapidly, exceeding 80%. Naturally, the share of STH supply has fallen below 20%.
Keep in mind that an augment in LTH supply does not mean that any “buying” is taking place. LTH does not take coins from STH, instead STH members are promoted to the LTH group after holding for 155 days, which increases the group’s supply.
As such, the recent augment in LTH supply does not suggest any accumulation in the market. Rather, it shows that investors who bought a few months ago are willing to continue HODLing. This could naturally be a bullish sign for Bitcoin price.
While there is a 155-day delay for “buying” LTH, there is no such delay for selling. The age of coins held by LTH immediately resets to zero as soon as those diamond hands transfer them to the blockchain, and the tokens are transferred to the STH supply.
The chart shows that LTH also participated in another sell-off this year before this latest one. This distribution occurred when the price rose to its all-time high (ATH), meaning the rally was too good for even HODLers to miss.
BTC price
Bitcoin recouped some of its recent gains as its price fell to $61,800.
Looks like the price of the asset has plunged over the past day | Source: BTCUSD on TradingView
Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com
