Emily Walker
Recent on-chain analytics indicate that the supply of Bitcoin held by long-term holders has recently changed direction. Here’s what the historical context suggests this might indicate.
Possible Bottom in Bitcoin Long-Term Holder Supply
In a recent update on X, analyst James Van Straten discussed the latest shifts in the Bitcoin long-term holder supply. Long-term holders (LTHs) are identified as those who have maintained possession of their coins for longer than 155 days.
The LTHs represent one of the two primary segments of the market categorized by holding duration, the other being short-term holders (STHs).
Historically, STHs are seen as more impulsive investors, quick to sell when faced with fear, uncertainty, or doubt (FUD), or excitement (FOMO). In contrast, LTHs demonstrate a steadfast commitment and weather market fluctuations.
Despite their resilience, even these holders seek to capitalize on their investments eventually. A noteworthy instance of LTH selling occurred during Bitcoin’s recent peak price exploration, indicating that the price increase was too tempting for some long-term investors to ignore.
There are various methods to analyze the behavior of LTHs, one of which involves assessing the total supply held by this group in their wallets.
Below is a chart from Glassnode showcasing the historical trends regarding this specific metric.
The chart reveals that towards the end of 2024, the supply held by Bitcoin LTHs had been on a decline, as investors sold off to take profits from the market rally. However, a slight recovery has recently been observed, with this group’s holdings increasing by about 20,000 BTC.
This trend may indicate that the supply among long-term holders has bottomed out and is beginning to grow again. Historically, significant increases in LTH supply have coincided with price peaks, suggesting this might not necessarily signal bullish conditions for BTC.
Nevertheless, not all instances where LTH supply dropped coincided with market peak prices were cyclical in nature. For example, the price peak in the first quarter of the previous year occurred while the LTH supply was also at a low point.
It remains to be seen whether the current trend in LTH supply suggests the previous price peak was part of a larger cycle or if it simply represents a temporary high in the market.
Current BTC Price Action
Bitcoin continues its recovery from yesterday, with prices now surpassing the $99,000 mark.