- The growing dormant supply of BTC showed investors’ lack of willingness to sell.
- Investor sentiment tended to the negative side in sync with the low volatility phase.
Bitcoin [BTC] has entered a phase of consolidation, with last week’s trades fluctuating in the narrow $26,600-$27,500 range, according to on-chain analytics firm Glasnode. This phase was similar to the one during the first week of 2023, when king coin volatility fell to a record low.
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Due to the absence of volatility in either direction, Bitcoin’s market witnessed significantly low on-chain volume, reflecting a growing investor tendency to hold on to their coins.
Hold on for dear life
Glassnode observed a significant drop in transaction volume settled on the Bitcoin network. While the number of low-volume transactions involving Ordinals and BRC-20 tokens has skyrocketed, the transfers involving the movement of a large portion of BTC tokens have declined.
To emphasize this even more, there was also a sharp fall in the volume of foreign exchange deposits.
Source: Glassnode
Investors’ lack of willingness to sell was demonstrated by the growing dormant supply of BTC. The percentage of supply held for more than a year has reached record highs. Most age groups recorded an increase in hodling activity.
This behavior was also seen in Long-Term Holder Supply, or BTC held for over 155 days, reaching a new all-time high of 14.46 million.
Interestingly, the hodling story grew despite BTC making huge gains in 2023, almost 64% year-over-year (YTD).
Source: Glassnode
Furthermore, the Bitcoin Liveliness metric. comparing hodling and spending patterns fell to the lowest level since December 2020. This implied that holding was the dominant narrative in the market at the time of writing.
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Slow growth in Open Interest
Bitcoin continued to move in the aforementioned range at the time of writing. The coin was back above $27,000, up 1.6% in the 24-hour period, data from Santiment showed. Investor sentiment tended to the negative side, in sync with the low volatility phase.
Source: Sentiment
Since mid-April, Open Interest (OI) in Bitcoin futures has fallen significantly, due to a lack of speculative demand for the coin. This supported the idea that major participants took a wait-and-see attitude because the market was not giving clear buy or sell signals.
Source: Coinglass