In a bullish phase, long-term holders (LTHs) often offload Bitcoin as prices rise. This trend was evident from early 2024 to April, with significant declines in the supply held by 1-year and 2-year old UTXOs. However, the supply of Bitcoin in UTXOs held for over three years continues to rise, indicating long-term bullish sentiment.

Over 50% of the total Bitcoin supply has remained inactive on-chain for over a year, demonstrating strong conviction among LTHs. This inactivity suggests that a significant portion of Bitcoin investors are confident in the asset's long-term value, choosing to hold rather than sell despite market fluctuations.

As Bitcoin's price recovers from the recent correction to $56,000, a shift in holder behavior is observed. The 1-year+ and 2-year+ cohorts have stopped selling, transitioning from a distribution phase to a holding phase. This shift indicates renewed confidence in Bitcoin's future price potential.

Bitcoin's technical outlook is at a critical juncture, with the price testing significant support levels. The behavior of LTHs and key on-chain metrics suggest 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 are advised to closely monitor these technical and on-chain indicators.