Long-Term Holder Supply Is Now Rising Again

On-chain data shows that long-term Bitcoin holders have recently increased their dominance, suggesting a rise in HODLing conviction.

Bitcoin Long-Term Holder Supply Is Going Up Again

As explained by CryptoQuant author Axel Adler Jr in a new post on X, the supply of long-term holders is on the rise again The “long-term holders” (LTHs) here refer to the Bitcoin investors who have been holding onto their coins since more than 155 days ago.

The LTHs comprise one of the two main divisions of the BTC market based on holding time, with the other cohort being known as the “short-term holders” (STHs).

Historically, the LTHs have shown to be resilient HODLers, who don’t sell even when major changes in the market occur, like a rally or crash. The STHs, on the other hand, easily react to happenings in the market.

Below is a chart showing how the two groups’ supply dominance has changed over the last few years.

The value of the metric appears to have shot up in recent days | Source: @AxelAdlerJr on X

The graph shows that the Bitcoin LTHs had seen their supply share significantly go down earlier in the year, reaching a low of 78% by the time of the crash near the beginning of this month.

The metric has recently rebounded sharply, as its value has crossed over 80%. Naturally, the STH supply share has shrunk below 20%.

Remember that an increase in the LTH supply doesn’t signify that any “buying” is happening. The LTHs don’t take coins off the STHs, rather what happens is that STH members get promoted into the LTH group after holding for 155 days, thus adding to the group’s supply.

As such, the recent increase in the LTH supply doesn’t suggest any accumulation in the market. Still, rather it shows there has been a willingness among investors who bought a few months ago to continue to HODL. This can naturally be a bullish sign for the Bitcoin price.

While LTH “buying” has a 155-day delay attached to it, the same isn’t true for selling. The age of the coins held by the LTHs instantly resets back to zero as soon as these diamond hands transfer them on the blockchain, and the tokens move into the STH supply.

The chart shows that the LTHs had also participated in another selloff this year before this latest one. This distribution had come as the price had risen to its all-time high (ATH), implying that the rally was too good for even these HODLers to miss out on.

BTC Price

Bitcoin has retraced a part of its recent recovery as its price has dropped to $61,800.

Looks like the price of the asset has plunged over the past day | Source: BTCUSD on TradingView

Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com