Bitcoin Long-Term Holder Supply Is Going Up Again

On-chain data shows that long-term Bitcoin holders have recently increased their dominance, suggesting a rise in HODLing conviction.

Recent on-chain data has highlighted a rise in the dominance of long-term Bitcoin holders, indicating an increase in HODLing conviction among investors in the cryptocurrency.

According to a new post on X by CryptoQuant author Axel Adler Jr, the supply held by long-term holders (LTHs) has been increasing over the past few weeks.

In the Bitcoin market, LTHs are defined as investors who have been holding their coins for more than 155 days. The two main categories of holders in the BTC market are LTHs and short-term holders (STHs).

Historically, LTHs have been known to be strong HODLers who are less likely to sell their coins even during major market movements, such as rallies or crashes. STHs, on the other hand, tend to react more quickly to market events.

The following chart shows how the supply dominance of these two groups has changed over the past several years.

As you can see in the graph, the Bitcoin LTHs saw their share of the total supply decrease significantly earlier this year, reaching a low of 78% around the time of the market crash at the beginning of this month.

However, the metric has bounced back sharply since then, with its value crossing above 80%. This has caused the STH supply dominance to shrink to below 20%.

It's important to note that an increase in the LTH supply does not necessarily indicate any "buying" activity. LTHs do not acquire coins from STHs; instead, STH members are promoted to the LTH group after holding their coins for 155 days, which adds to the LTH supply.

Therefore, the recent increase in the LTH supply is not directly indicative of accumulation in the market, but rather suggests a willingness among investors who purchased a few months ago to continue HODLing. This could be a bullish sign for the Bitcoin price.

While there is a 155-day delay in LTH "buying" as described above, the same is not true for selling. The age of the coins held by LTHs resets to zero immediately if these diamond hands decide to move their coins on the blockchain, and the tokens become part of the STH supply.

The chart also shows that the LTHs participated in another sell-off earlier this year before the recent one. This distribution occurred as the price reached its all-time high (ATH), suggesting that the rally was too strong even for these HODLers to sit out.

BTC Price

Bitcoin has retraced a portion of its recent recovery, with its price dropping to $61,800.