In a bullish crypto market, it is usual that long-term holders (LTHs) sell their Bitcoin as prices surge. This was more visible from early 2024 until April. The 1-year and 2-years old unspent transaction outputs (UTXOs), as per CryptoQuant, saw significant drops in the supply they held. However, even though there has been selling pressure on these UTXOs, Bitcoin supply in UTXOs older than three years keeps growing. This indicates heightened long-range optimism by such holders.
During bullish phases, it's common to observe LTHs offloading portions of their #Bitcoin holdings as prices rise“The 1-year+ and 2-year+ cohorts have ceased selling, transitioning from a distribution phase to a holding phase.” – By @0nchainedLink 👇https://t.co/rjw1eDc7XE
— CryptoQuant.com (@cryptoquant_com) May 29, 2024
Over 50% of Bitcoin Supply Inactive for a Year, Signaling Long-Term Confidence
For over a year, more than 50% of the whole Bitcoin supply has been inactive on-chain, and this shows how strong this coin’s long-term value is believed to be by people who keep it for a long. This means that these owners are confident in holding their Bitcoins instead of selling them when the market fluctuates. Such behavior indicates faith in continuous growth of Bitcoin’s worth with time.
After having fallen to $56k recently, Bitcoin is now recovering its price; therefore, holders have started acting differently than they did before. Those who have owned their Bitcoins for at least one or two years are not selling them anymore. This change from distribution to accumulation phase suggests among these groups there is again trust in the future prices of BTC. Therefore, these categories prefer keeping their assets rather than converting them into money at current rates.
Bitcoin Holders Show Confidence as Key Support Levels Are Tested
The technical outlook for Bitcoin is at a very important point currently. Prices are probing key support levels and long-term holders’ behavior and other on-chain metrics indicate strong underlying bullishness. However, if the daily Ichimoku cloud is breached, market sentiment could flip. This might cause a retrace to $64k. Technical and on-chain indicators should be monitored closely by investors so they can make educated decisions over the next few weeks.
Ultimately, the activity of Bitcoin holders for an extended period gives an idea about what people feel towards this asset class. This can be seen in the fact that more than half of all bitcoins have stayed dormant for more than one year which shows faith in its value over time. With critical supports still being tested by BTC prices, these participants’ moves together with key technical signals will determine where markets go next.
