On-chain data shows that the supply of bitcoin held by short-term holders has recently been declining at its fastest monthly pace since 2012.
bitcoin supply from short-term holders plummets as investors hold on to their assets
As CryptoQuant author Axel Adler Jr. explained in a new articlex.com/AxelAdlerJr/status/1836352682484744298″ target=”_blank” rel=”noopener nofollow”> mail On x, the 30-day change in short-term holder supply has sunk deep into negative territory recently.
“Short-term holders” (STH) are bitcoin investors who purchased their coins in the last 155 days. This cohort is one of two main segments of the btc market, divided based on holding time; the other group is known as “long-term holders” (LTH).
Statistically, the longer an investor holds onto their coins, the less likely they are to sell them at some point. STHs can therefore be seen as representing the fickle side of the industry, while LTHs are the stubborn ones.
One way to track the behavior of these groups is through the total amount of bitcoin they have in their wallets at the moment. Below is the chart shared by the analyst, which shows the 30-day change in the supply held specifically by STH.
<img decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/09/Bitcoin39s-short-term-supply-falls-at-fastest-pace-since-2012.jpeg" alt="Changes in the bitcoin STH supply” width=”2048″ height=”1152″/>
The value of the metric appears to have plummeted in recent days | Source: x.com/AxelAdlerJr/status/1836352682484744298/photo/1" target="_blank" rel="noopener nofollow">@AxelAdlerJr on x
As shown in the chart above, the 30-day change in bitcoin STH supply had seen a strong positive spike earlier in the year as the rally towards the new all-time high (ATH) took place.
This suggests that there has been a massive transfer of supply from LTH to STH. The chart shows that this is not unusual in a bull run, as historically LTHs have tended to take some of their HODLing profits when the asset has hit new highs.
The sales that these diamond hands participate in during such periods are absorbed by the new demand that comes to the market after getting caught up in the enthusiasm of the rally.
Since bitcoin dropped into consolidation, LTHs seem to have calmed down their selling. Not only that, the trend seems to have completely changed recently as the 30-day change in STH supply has dipped into the negative region.
Over the past month, STH supply has decreased by around 15%, the lowest 30-day change recorded since 2012, when the cryptocurrency was still in its infancy.
Naturally, this means that the supply of LTH has increased. However, it should be noted that this trend does not mean that LTH is “buying” these tokens from the hands of STH.
Rather, what is happening is that STHs are “maturing” in the cohort, after holding beyond the 155-day limit. Therefore, it seems that even STHs have been content to be patient during this period of consolidation. This rise in HODLing sentiment may naturally be a positive sign for bitcoin.
btc Price
At the time of writing, bitcoin is hovering around $59,500, up around 5% over the past seven days.
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Looks like the price of the coin has gone down over the last 24 hours | Source: BTCUSDT on TradingView
Featured image by Dall-E, CryptoQuant.com, chart by TradingView.com
