Bitcoin holders are starting to show clear signs of increased conviction in the asset as their supply dynamics change.
The asset, with a market cap of $1.59 trillion, has continued to fluctuate between $79,000 and $81,000 in recent weeks, without a decisive break in either direction.
This change in momentum among long-term holders could determine the asset’s next move.
Supply momentum has been rising to the top 1% since 2017
The long-term holder momentum indicator, which tracks Bitcoin’s supply [BTC] owned by this group has recorded a major spike. Long-term holders are defined as wallets that have held Bitcoin for more than 155 days without moving their coins.
The recent uptick in momentum puts the sector among the top 1% of gains recorded since 2017, according to data from Alphractal.
Historically, sudden shifts of this nature have driven prices into a consolidation phase or a significant increase.
The latter seems the most likely outcome here, as an increase in the supply of long-term investors reduces the available float in the market.
With demand for Bitcoin gradually rising, tighter supply dynamics could improve conditions for a bullish price scenario.
Long-term holders show no intention to sell
While the data points to a surge in supply from long-term owners, examining sentiment within this group adds important context.
The Bitcoin Binary Coin Days Destroyed (CDD), which tracks whether long-term holders have moved their coins for potential sale based on a binary value of 1 or 0, shows that no significant distribution is taking place.
A value of 1 indicates notable coin movement, while a value of 0 indicates minimal activity. Data from CryptoQuant shows that long-term holder Binary CDD has remained at zero, meaning there has been minimal movement of Bitcoin towards exchanges for sale.
The LTH-STH Spend Output Profit Ratio tracks whether long-term holders or short-term holders drive the profits realized in the market.
A higher value typically implies that long-term holders are taking profits, but the measure has continued to decline, indicating that short-term holders have driven most of the market’s Bitcoin selling over the past day.
At the time of writing, CoinGlass data shows that total Bitcoin sold on May 13 was $1.89 billion, with sales at the time of writing reaching $541 million. Still, net inflow figures for both days suggest buyers remain in control.
AMBCrypto signals temporary market stress
Compared to previous bear market cycles, long-term investors are in the calmest phase ever. An AMBCrypto analysis previously described current conditions as a “temporary market stress.”
Relative unrealized losses have peaked at 15%, a significantly muted figure compared to the bear cycles of 2015, 2019 and 2022, where the same measure soared all the way above 75%.
While this positions Bitcoin as structurally sound and sets the conditions for a potential bullish recovery, short-term market activity remains a key variable in shaping short-term sentiment.
Final summary
- Supply momentum for long-term Bitcoin holders has risen to the top 1% of increases recorded since 2017, reflecting a significant shift in accumulation.
- Long-term bondholders are showing minimal selling activity, with relative unrealized losses peaking at just 15%, compared to levels above 75% in previous bear cycles.