Despite the recent volatility in the cryptocurrency market, on-chain data paints a picture of unwavering conviction among long-term Bitcoin investors.
A recent report from analytics firm Glassnode reveals that nearly half of the available Bitcoin supply has not been moved in the past six months, suggesting a strong belief in the long-term potential of the digital asset.
While Bitcoin reached a new all-time high five months ago, a significant portion of the investor base has opted to hold onto their coins. Glassnode’s analysis of the “Realized Cap HODL Waves” indicator shows that over 45% of all Bitcoins have remained dormant for at least six months. This statistic suggests that even in the face of record highs and subsequent price fluctuations, a substantial number of investors are content with a buy-and-hold strategy.
The behavior of long-term holders (LTHs), defined as entities holding coins for at least 155 days, reveals a more nuanced picture. While LTHs did engage in some distribution leading up to and following Bitcoin’s all-time high, this trend appears to have reversed.
Glassnode explains, “We can see substantial LTH distribution, typical of macro topping formations, into the March ATH [all-time high].” Notably, the data shows that less than 1.7% of trading days have ever witnessed a larger selling pressure from LTHs. However, the report highlights a recent shift: “More recently, this metric has returned to positive territory, indicating that the LTH cohort are expressing a preference for holding onto their coins.”
This trend aligns with Glassnode’s description of “a notable slow-down in the distribution pressure by LTHs.” The report continues, “This has led to the percentage of network wealth held by this cohort to firstly stabilize, and then recommence growing.” These findings suggest that while LTHs engaged in some selling during the all-time high, the overall wealth held by long-term investors remains historically elevated compared to previous peak periods.
As Cointelegraph has reported, concerns about a potential retest of six-month lows and analysis pointing towards on-chain movement of “older” coins continue to weigh on the minds of some traders in August. Additionally, fluctuations in the Crypto Fear & Greed Index underscore the uncertainty currently present within the broader cryptocurrency market.
However, counteracting this negativity is the potential for renewed optimism fueled by global liquidity conditions. Some perspectives, such as that of Charles Edwards, the founder of quantitative Bitcoin and digital asset fund Capriole Investments, view a potential shift towards financial policy easing as a positive development for crypto assets. Edwards recently stated on Twitter, “Global money supply is exploding up. Plus we just broke out of a massive 4-year consolidation. What do you think this means for Bitcoin?”
On-chain data reveals a fascinating story about the behavior of Bitcoin investors. While short-term volatility may instill fear in some, a significant portion of the market, particularly long-term holders, appears to be adopting a long-term perspective. As the global economic landscape continues to evolve, it will be interesting to see how this dynamic plays out and how it impacts the price of Bitcoin in the months and years to come.
