- The Bitcoin supply traded in the past three months is up from 11.5% to 21.4%.
- The total supply for less than six months fell sharply in May.
Several analyzes focused on Bitcoin [BTC] have recently unanimously agreed that the king coin was in the midst of an accumulation phase, with most long-term holders showing a lack of desire to sell their holdings.
However, a recent study by Glassnode revealed that this trend is nearing its tipping point. The percentage of Bitcoin supply traded in the past three months rose from 11.5% to 21.4% in May, an exponential increase of 86%.
This meant there was a noticeable transfer of Bitcoin from long-term investors to newer entrants, suggesting bullish market trends.
The 1d-3m #Bitcoin Realized Cap HODL Waves has risen from a cycle low of 11.5% to a current value of 21.4%, an increase of 86%.
This suggests that the transfer of wealth from experienced possessors to newer demand is taking place, a phenomenon common at all inflection points of the cycle. pic.twitter.com/M6ibcjvynb
— glassnode (@glassnode) June 1, 2023
Bitcoin supply that is less than three months old is typically considered to be highly mobile, liquid, and likely to be issued during periods of volatile price swings. Also referred to as “young coins,” this offering increases in volume during a bull market phase when long-term holders begin to sell and take profits. As indicated below, the supply increased considerably in May.
Source: Glassnode
But does that really mean “diamond hands” made a profit?
As can be seen in the chart below, the supply of BTC older than six months has grown from a share of 75% in early May to 78% at the time of writing, indicating the lack of willingness of long-term holders to sell.
Source: Glassnode
The answer lies here
According to Glassnode, the increase in coins younger than three months would only occur when coins older than three months are spent. As seen earlier, this transfer was not driven by coins older than six months, or BTC’s long-term holders.
This actually meant that the cohort that acquired the coins in the last 3-6 months set this in motion. As shown in the chart below, total supply for less than six months fell sharply in May, confirming that capitulation occurred in the 3-6 month age range.
Source: Glassnode
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Bitcoin: Retail Investors Drive Demand
Interestingly, there is a surge in private investors for Bitcoin. Data from Santiment showed that wallets with less than 10 coins were mushrooming in May, most likely driven by Ordinals and BRC-20 token frenzy.
So it could be possible that most of these new investors were part of the 1D-3m age bracket, as discussed earlier.
Source: Sentiment