- Bitcoin supply, which had been held for over a year, reached ATH across several age categories.
- A clear difference was observed in the LTH and STH offerings.
With the expected halving event scheduled for April 2024 and optimism about spot Bitcoin [BTC] ETF approvals are reaching a fever pitch, the coming months will be exciting for investors.
These bullish catalysts have kept experienced holders from abandoning their stock and made HODLing a viable option. As a result, Bitcoin’s supply of liquid assets has shrunk significantly, while its supply in self-custody wallets has increased.
Diamond hands resist temptations
This was mainly reflected in the long-term holder strategy (LTH). a report by on-chain analytics firm Glassnode showed that Bitcoin supply held for over a year had reached an all-time high (ATH) across several age categories.
Source: Glassnode
Additionally, in wallets with a not-so-good spending track record, supply increased to ATH of 15.4 BTC at the time of writing. Illiquid supply has been growing steadily since the cycle low of the 2021 bull market.
In fact, since May 2021, almost 1.7 million coins have been moved to illiquid wallets.
Source: Glassnode
A similar conclusion was reached after examining the Hodler Net Position Change indicator. When new coins are collected by long-term holders, the indicator typically appears as positive and green.
As is clear, LTHs have been steadily growing and holding their supply since the sell-off following the FTX collapse last year.
Source: Glassnode
While coins were clearly aging, this wasn’t just driven by whales or investors with a huge supply. Cohorts with much smaller assets also began accumulating aggressively since late October.
Source: Glassnode
The LTH and STH offerings vary
LTH’s reluctance to liquidate their holdings caused the supply of short-term holders (STH) to decline further. A clear difference was observed in LTH and STH offerings, as shown below.
Typically, the supply patterns of the two user cohorts move in opposite directions. LTHs accumulate coins during a consolidating market and wait for a bull run to distribute their holdings. This manifested itself during the 2021 bull run.
Much of the supply was captured by newer players in the market, as evidenced by the spike in STH supply.
However, when the bear market arrived, the trajectory reversed. LTHs have increasingly taken advantage of periods of volatility to replenish their stacks, while STH have been happy to flip their coins for profits.
Source: Glassnode
The recent price increase to $35,000 resulted in a noticeable shift in the spending behavior of short-term holders. The results of the Sell-Side Risk Ratio indicator show that investors have made big profits holding BTCs for less than 155 days.
Source: Glassnode
On the other hand, LTH’s sales risk ratio was on historical laws, according to the report. Interestingly, the levels were similar to those of the 2016 and 2020 cycles. No prizes for guessing what came next!
The market remains optimistic
Meanwhile, Bitcoin broke through $35,000 again, raising hopes for a more sustainable move north. At the time of writing, BTC was exchanging hands $35,258.96, according to CoinMarketCap.
In a quote to AMBCrypto, Shivam Thakral, CEO of Indian cryptocurrency exchange BuyUCoin, shared his views on the market and said:
“The digital asset industry is ready for the next phase of responsible growth as the FTX trial comes to an end. Positive market sentiment points to healthy and sustainable growth in the coming weeks, depending on macroeconomic conditions.”
How much are 1,10,100 BTCs worth today?
Bitcoin’s Fear and Greed Index also matched the optimism. AMBCrypto also examined Hyblock Capital’s data and found that the market has been in a state of greed for the past ten days.
Generally, investors become greedy in a rising market, resulting in greater buying pressure. So there were high chances that BTC would rise further.
Source: Hyblock Capital