Bitcoin Long-Term Holder Supply 30-Day Change Has Been Negative Recently

On-chain data shows the Bitcoin long-term holder supply has continued declining recently. Here's what this could mean for the asset.

Bitcoin (BTC) has been displaying some interesting trends in its long-term holder (LTH) supply, and these movements could have significant implications for the asset’s price.

As defined by CryptoQuant, LTHs are BTC investors who have held their coins for over 155 days. These LTHs are crucial in the Bitcoin market, as their behavior can influence the overall price movements of the cryptocurrency.

Statistically, it has been observed that the longer an investor holds their BTC, the less probable they are to sell it at any given time. Owing to this characteristic, LTHs are often viewed as the stubborn part of the market, in contrast to the short-term holders (STHs), who are known for their fickle-mindedness.

According to a recent analysis by CryptoQuant author Axel Adler Jr, the BTC LTH supply has not been showing any signs of growth recently. This trend has been continuing since the approval of spot exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC) in January.

As highlighted by Jr, the LTHs did participate in a selloff recently, which is evident from the sharpest plunge in the 30-day change of the LTH Supply metric, coinciding with the BTC rally toward its new all-time high (ATH).

These diamond hands, as they are often referred to, typically hold their coins for extended periods, accumulating substantial gains. The timing of this selloff suggests that these profits ballooned so significantly during the rally that even the LTHs found it difficult to resist the allure of profit-taking.

Despite the bearish price action that BTC has been experiencing recently, the 30-day change in LTH Supply has continued to show a decline, albeit at a much slower rate. This continued drawdown is particularly noteworthy considering that the spot ETF approval launch is now older than 155 days.

It appears that any buying by HODLers at the time is being offset by fresh selling from older cohort members, further highlighting the complex dynamics at play in the Bitcoin market.

Interestingly, Jr also points out that the lack of growth in the LTH supply could be an indication of market-wide pessimism. As the graph Jr shared also shows, this is not something entirely new in this cycle.

It seems that the LTHs also participated in selloffs in the middle of the last two bull runs. Therefore, the recent distribution from the LTHs may not necessarily be a bad sign in the long term.

At the time of Jr’s analysis, BTC was trading at around $61,200, showing a decrease of over 4% in the past week.