During bullish phases, it's common to observe long-term holders (LTHs) offloading portions of their Bitcoin holdings as prices rise. This trend was apparent from early 2024 through April, with notable declines in the supply held by the 1-year and 2-year old UTXOs. Despite this selling pressure, the supply of Bitcoin in unspent transaction outputs (UTXOs) held for over three years continues to increase, signaling long-term bullish sentiment among these holders.
More than 50% of the total Bitcoin supply has remained inactive on-chain for over a year, reflecting a strong conviction among long-term holders. This inactivity suggests that a significant portion of Bitcoin investors are confident in the asset's long-term value, opting to hold rather than sell despite market fluctuations.
Supply Dynamics and Holder Behavior
As Bitcoin's price recovers from the recent correction to $56,000, we notice a shift in holder behavior. The 1-year+ and 2-year+ cohorts have ceased selling, transitioning from a distribution phase to a holding phase. This change indicates a renewed confidence in Bitcoin's future price potential, as these cohorts choose to retain their holdings rather than liquidate them at current prices.
Bitcoin's technical outlook is currently at a critical juncture, with the price testing significant support levels. The behavior of long-term holders, coupled with key on-chain metrics, suggests a strong underlying bullish sentiment. However, a break below the daily Ichimoku cloud could shift market sentiment, potentially leading to a price retracement towards $64,000. Investors should closely monitor these technical and on-chain indicators to make informed decisions in the coming weeks.
Written by onchained