Bitcoin Long-Term Holders Witness First Supply Increase Since April: Is This a Bullish Indicator?

On-chain data indicates that Bitcoin investors who have held their assets for more than six months have recently experienced an uptick in their supply for the first time in several months.

Key Takeaways

Bitcoin’s long-term holder supply has experienced its first increase since April, signaling a shift in investor sentiment.
Long-term holders are defined as those who have kept their coins inactive for over six months, indicating stronger commitment to holding.
Despite recent selling activity among LTHs, the current uptick in supply may suggest a trend toward HODLing.
Historically, past increases in long-term-held supply have led to significant upward price movements.
Bitcoin's price has recently stabilized around $87,500 after slipping below $84,000.

Bitcoin

Recent Shift in Bitcoin Long-Term Holder Supply

As noted by Charles Edwards, the founder of Capriole Investments, in a recent post on X, the supply of Bitcoin that has remained inactive for six months has shown its first increase since April. This portion of the supply reflects tokens that have not been involved in any transactions on the blockchain for at least six months and belongs to what are known as long-term holders (LTHs).

Statistical trends suggest that the longer investors keep their coins inactive, the less likely they are to sell them in the future. Therefore, LTHs, with their extended holding periods, represent the more steadfast participants in the market. However, despite their holding patterns, LTHs have engaged in selling activity over the past few months. Below is a chart shared by Edwards displaying the trend in Bitcoin supply dormant for more than six months.

Bitcoin LTH Supply

This graph illustrates how the supply of Bitcoin that was last active over six months ago has evolved over the past eighteen months | Source: @caprioleio on X

The chart indicates a decline in the Bitcoin LTH supply, particularly during last month’s significant cryptocurrency crash, implying that even the most committed holders participated in some sell-off. However, following this drop, the decline appears to have halted, at least momentarily, and there’s been a slight uptick recently, hinting at a possible change in investor sentiment.

It’s important to recognize that while decreases in LTH supply often align with current selling activity, increases do not necessarily indicate that these holders are making purchases now. Instead, an uptick suggests that coins acquired six months ago have now matured into the LTH category.

Overall, this trend signals a positive development for Bitcoin, as it implies that HODLing behavior is becoming more prevalent within the network. The last time we observed such a shift was during the lows of the cryptocurrency market in April.

Following that increase in LTH supply, Bitcoin experienced a significant rally, reaching new all-time highs (ATHs). This raises the question of whether the recent trend in long-term holding will lead to similar outcomes or if Bitcoin’s downward trajectory will persist.

Current Bitcoin Price

Bitcoin briefly dropped below $84,000 on Monday but has since recovered, currently trading at around $87,500.

Bitcoin Price Chart

This chart captures the movement of Bitcoin’s price over the last five days | Source: BTCUSDT on TradingView