Recent on-chain data indicates that the Bitcoin supply held by short-term holders has recently declined at the quickest monthly rate seen since 2012.
Supply of Bitcoin Short-Term Holders Declines as Investors HODL
According to a new post by CryptoQuant analyst Axel Adler Jr. on X, the 30-day change in short-term holder supply has sharply dropped into negative territory recently.
“Short-term holders” (STHs) are Bitcoin investors who acquired their coins in the past 155 days. This group represents one of the two primary segments of the BTC market categorized by holding duration, with the other group being the “long-term holders” (LTHs).
Statistically speaking, the longer an investor keeps their coins, the less likely they are to sell them. Therefore, STHs are often viewed as the more indecisive segment of the market, whereas LTHs are seen as the more committed ones.
One method to monitor the actions of these groups is by examining the total amount of Bitcoin held in their wallets at the moment. Below is the chart provided by the analyst, which illustrates the 30-day change in the supply specifically held by STHs.
The metric's value appears to have significantly dropped in recent days | Source: @AxelAdlerJr on X
The chart above shows that earlier this year, the 30-day change in the Bitcoin STH Supply experienced a notable positive spike during the rally leading to a new all-time high (ATH).
This indicates that a significant transfer of supply occurred from LTHs to STHs. Historically, this pattern is common during bull rallies, as LTHs often take some of their HODLing profits when the asset reaches new peaks.
The selling activity from these diamond hands during such phases is typically absorbed by incoming demand from new market participants who are drawn into the excitement of the rally.
As Bitcoin has entered a consolidation phase, LTHs seem to have eased their selling. Moreover, the trend has recently reversed, with the 30-day change of STH supply now falling into negative territory.
In the past month, the STH supply has decreased by approximately 15%, marking the lowest 30-day change recorded since 2012, during the cryptocurrency’s early days.
Consequently, this means that the LTH supply has increased. It’s important to note, however, that this trend doesn’t imply that LTHs are “buying” these tokens from STHs.
Instead, what is occurring is that STHs are “maturing” into the LTH group after surpassing the 155-day holding period. This indicates that even STHs are demonstrating patience during this consolidation phase. Such a shift in HODLing sentiment can be a positive indicator for Bitcoin.
BTC Price
At the moment, Bitcoin is trading around $59,500, reflecting a 5% increase over the past week.
It appears that the price of Bitcoin has decreased over the last 24 hours | Source: BTCUSDT on TradingView
Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com
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